Why SoFi Stock Is Down Today and What This Investor Predicts Next

SoFi Technologies (NASDAQ:SOFI) stock hasn’t had an easy year, with shares sliding 30% since the turn of the year. Yet, despite the pullback, investors were still hoping for one catalyst – a possible addition to the S&P 500. Inclusion would likely have triggered a wave of demand from index funds that track the benchmark.

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Then the list came out. And SoFi wasn’t on it.

S&P Dow Jones Indices instead selected Vertiv, Lumentum, Coherent, and EchoStar for inclusion in the index. With SoFi left out of the rebalance, the stock slipped about 3.5% as investors recalibrated expectations.

Still, the broader story surrounding SoFi may look quite different depending on where one chooses to focus.

One investor, known by the pseudonym Bay Area Ideas (BAI), believes the underlying business continues to move in the right direction. In BAI’s view, SoFi sits “in a great position in the fintech space,” supported by solid user growth that has translated into stronger financial performance.

The investor also points to improving efficiency as a key element of the company’s progress. Margin expansion has helped produce an impressive Rule of 40 score, a metric that blends growth and profitability and is commonly used to evaluate technology firms.

Looking ahead, SoFi expects revenue growth of about 30% in fiscal 2026. That would represent a slowdown from the 38% growth recorded in the previous year, though BAI describes the overall outlook as respectable.

The investor believes profitability improvements may play a larger role in the next phase of the company’s development. The firm projects adjusted EBITDA margins of 34%, alongside continued gains in net income margins.

Valuation also shapes BAI’s thinking. The stock’s forward price-to-earnings ratio has declined toward levels that the investor views as unusually low compared with the company’s historical range.

Taken together, those elements lead the investor to believe the market may be mispricing the stock. BAI also notes that the chief executive recently purchased shares, a move he interprets as a vote of confidence in the company’s trajectory.

For BAI, the recent weakness represents a period of consolidation rather than deterioration. The investor expects that the stock will eventually begin a new upward move as the fundamentals continue to improve.

“I’ve decided to upgrade SoFi to a buy, as the valuation contraction makes little sense when looking at the fundamentals and outlook of the company. The stock’s selloff to start 2026 seems overdone even if the valuation may have been a bit high late last year,” the investor summed up. (To watch Bay Area Ideas’ track record, click here)

Wall Street, however, appears somewhat cautious. Analysts currently assign SoFi stock a Hold (i.e., Neutral) consensus rating, based on 5 Buy, 7 Hold, and 3 Sell recommendations. But despite the hesitation, the average price target of $25.96 suggests potential upside of ~42% from current levels. (See SOFI stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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