Hook / Thesis
SoFi Technologies is showing the kind of fundamental improvement that matters to investors: sequential revenue gains, meaningful operating leverage and a balance sheet that is growing fast. The most recent quarter (Q3 fiscal 2025, filing dated 11/06/2025) delivered $156.8M of revenues and $139.4M of net income, with operating income of $148.6M. Those are not trivial numbers for a fintech that has been scaling its banking and lending franchises while integrating Galileo and other product lines.
Market action has already priced in some of the progress: the stock traded around $29.32 at the latest intraday print. That creates an actionable swing trade: a tactical long with a conservative stop and two upside targets. The trade banks on continued margin expansion and deposit (or funding) growth translating into repeatable profitability over the next several quarters.
What SoFi does and why it matters
SoFi started as a student-loan refi shop and has become a diversified digital financial-services platform: personal loans, mortgages, credit cards, investing, bank accounts and payments (Galileo). The company operates primarily through its app and web channel, positioning itself as a one-stop financial app for consumers. The core fundamental driver here is the conversion of scale and customer engagement into higher interest income and recurring noninterest income.
Why the market should care: the path to durable value for fintechs is a combination of growing interest income (from loans, securities and deposits), stickier noninterest revenue (cards, fees, payments) and improving operating leverage. SoFi's recent quarters show each of those moving in the right direction.
Evidence from the headlines (recent financials)
- Sequential revenue growth: Q1 2025 revenue was $140.4M (filed 05/06/2025), Q2 2025 was $151.9M (filed 08/07/2025), Q3 2025 was $156.8M (filed 11/06/2025). The trend is modest but consistent over three quarters.
- Rising operating and net income: operating income progressed from $79.8M (Q1) to $112.2M (Q2) to $148.6M (Q3); net income attributable to the parent rose from $71.1M to $97.3M to $139.4M across the same quarters. Diluted EPS in Q3 was $0.11 on ~1.29B diluted shares.
- Interest and noninterest income strength: interest income (interest income/expense operating, net) was $498.7M in Q1, $517.8M in Q2 and $585.1M in Q3 — showing the core yield engine is growing. Noninterest income rose from $273.0M (Q1) to $337.1M (Q2) to $376.5M (Q3).
- Balance-sheet expansion: total assets grew to $45.29B in Q3 2025 (as of 09/30/2025) from $41.11B in Q2 and $37.75B in Q1 — roughly a 20% increase over three quarters. Equity attributable to parent stood at $8.78B as of 09/30/2025.
- Cash flow and financing: operating cash flow in Q3 shows a $1.306B outflow, offset by $3.797B of financing inflows in the same quarter. That indicates growth is being funded externally while operations scale.
Valuation framing
The dataset does not include a market capitalization figure. The most recent intraday trade prints show a price near $29.32. Historically the stock traded in the low-$10s to mid-$30s over the past 12 months, reflecting volatility tied to execution and sentiment. Given the improving profitability (three quarters of rising operating income and net income), the stock at current levels appears to price a reasonable amount of forward improvement but still leaves room for upside if revenue and funding trends continue.
Absent a formal peer group valuation in the data, the practical framing is qualitative: SoFi is transitioning from a growth spend mode to a more profitable bank-like NII (net interest income) engine plus recurring noninterest streams. If management sustains ROE improvement and positive operating cash flow over coming quarters, multiples should expand from the current investor perception.
Trade idea (actionable)
Setup: Tactical long (swing trade).
Entry: $28.50 - $30.50 (prefer partial entries near $29.00).
Stop: $25.00 (about 15% below current area) - move stop to breakeven when halfway to Target 1.
Target 1: $36.00 (roughly +23% upside) - take partial profits (50%).
Target 2: $45.00 (roughly +53% upside) - hold remainder to this second target if fundamentals continue to improve.
Position sizing / risk: Keep trade size such that the risk to stop is no more than 1-2% of your portfolio. This is a medium-risk trade: operational execution and funding risk remain.
Catalysts to monitor (2-5)
- Quarterly earnings / management commentary (next report): continued sequential growth in interest income and noninterest income, plus positive commentary on funding mix and deposit growth.
- Deposit/funding announcements: any disclosure of cheaper deposit growth, cost of funds improvements or durable deposit inflows would materially improve NIM prospects and investor confidence.
- Regulatory or product partnerships: wins on Galileo/partner integrations or card-book expansion that boost fee income.
- Cash flow inflection: a visible move from negative operating cash flow to neutral/positive would remove a key funding overhang.
Risks and counterarguments
I list the material risks below and include a direct counterargument to the long thesis.
- Funding and cash-flow risk: operating cash flow was a -$1.306B outflow in Q3 2025 while financing activities contributed +$3.797B. If capital markets tighten or financing costs rise, SoFi could face higher funding costs or slower asset growth; that would compress NII and margins.
- Execution risk on costs: noninterest expense in recent quarters remains substantial (Q3 noninterest expense $803.85M). If revenue growth slows or new investments fail to scale, operating leverage could reverse quickly.
- Credit / underwriting risk: the dataset shows provision for loan losses at $0 in recent quarters. That could be masking future reserve builds if macro conditions deteriorate or if asset mix shifts toward higher-risk lending.
- Regulatory and reputational risk: fintechs face evolving regulatory scrutiny; any regulatory action or material operational failure in payments (Galileo) could weigh heavily on valuation.
- Counterargument: the improvement in operating income and net income could be short-lived if much of the profit is driven by temporary financing or one-time items. Also, negative operating cash flow suggests the underlying business still consumes cash; until operations generate positive cash flow consistently, the share gains are more a story of funding than sustainable economics.
What would change my mind
I would turn neutral or bearish if: (a) the next quarterly release shows a decline in interest income or noninterest income sequentially; (b) operating cash flow does not start to normalize and management signals difficulty replacing financing inflows at reasonable cost; or (c) the company announces unexpected credit stress or an adverse regulatory outcome. Conversely, I would become more constructive if SoFi reports sustained positive operating cash flow, evidence of durable deposit funding at lower cost, and continued sequential growth in both interest income and fee revenue.
Final take
SoFi is now showing visible fundamental improvement: three quarters of sequential revenue and profit growth, rapidly expanding assets (now $45.29B at 09/30/2025) and rising interest and noninterest income. That combination supports a tactical long while accepting funding and execution risk. Use a disciplined entry and the $25 stop to cap downside; take partial profits at $36 and let the remainder run to $45 if the business continues to deliver.
Disclosure: This is a trade idea, not investment advice. Size the trade to your risk tolerance and monitor the catalysts above.