$SOFI · Ale's World of Stocks · 2026-10-28

we have to talk about SoFi today because they released their latest earnings report this week. After three consecutive quarters of disappointing post-earnings sell-offs, the stock actually fell by 6%, 15% and 9% immediately after each of those reports.

Well, this time the stock finally broke through thanks to amazing results, yet it is still down about half its value from its highest point, which makes me think it is still an excellent time to increase my stake in Sofia in the long term.

So, today we will analyze five specific reasons why I am more optimistic now than ever about Sophie’s long-term future following this strong earnings report.

We must start with those key figures that shattered almost every important metric this quarter when looking at their earnings . For example, sales jumped a massive 44% year-on-year to a record high of 1.37 billion, easily exceeding analysts' expectations of 1.25 billion.

Even better, their profitability is expanding faster than their sales, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rising 70% year-over-year to a record high of $470 million , while their profit margins have expanded from 29% last year to 34% today.

This also gave them the “ rule of 40” with a result nearly double that number, reaching a huge percentage of 79%. Very strong, very good, which is exactly what you would want to see in a technology stock like this.

This effectively represents the twentieth consecutive quarter in which they have outperformed the "rule of 40". On the net profit front, this marks the twelfth consecutive quarter of positive profitability for Sofy, with adjusted net income rising 75% year-over-year to another record high of $243 million .

When analyzing performance by sector, you can see that everything is operating at maximum capacity for them at the moment . Financial services, for example, saw its revenues grow by 25% year-on-year, while its fee-based revenues— which have a higher profit margin due to their capital-efficient nature—rose by 40% year-on-year to a record high of over half a billion dollars.

This now accounts for 42% of Sophie's entire revenue mix. This is a great sign. This is exactly what I wanted to see from this report. Secondly, their core lending segment continues to perform exceptionally well.

Revenue jumped 68% year-on-year, easily exceeding analysts' expectations by nearly $100 million.

This was driven by a record $16.9 billion in total loans issued, a 71% year-on-year increase. Now, these loans are mostly personal loans. There are also, of course, student loans and mortgage loans, but the largest share is for personal loans.

What's interesting here is that this has long been one of the biggest arguments, and not a bad one, made by pessimists or traders who don't like the "Sofi" stock. They were arguing that persistent inflation and high interest rates would drive SoFi borrowers to start defaulting on those personal loans.

Therefore, they actually considered that a major risk or hazard factor for "Sophie".

But surprisingly, Sophie's credit quality improved in the second quarter, even under these difficult circumstances, which is truly impressive . Their net write-off rate has fallen from 2.6% a year ago to 2.26% today, while 90-day delinquencies have dropped to just 0.4%, meaning we are not talking about high-risk borrowers.

In fact, their average income is $150,000, with an average credit score exceeding 740. So, they are fairly reliable borrowers as long as the economy holds up even in its current state, which is certainly not great . But, it is clear that things could get worse.

However, I think it would take a sudden collapse of the entire economy for Sophie to be affected, given its current strong performance. To be fair, this will always be one of those concerns associated with any kind of investment, and it's something that can always happen at any time.

But the biggest criticism that pessimists are trying to level at Sophie now after all this is that their only remaining argument is that their technology platform is not performing well. It has actually declined during this quarter.

But, um, this is just a consequence of Chime losing a client late last year. So, when you exclude the loss of that customer, the sector actually grew and recovered quarter after quarter.

It rose from 75 million in the first quarter to 84.5 million in the second quarter, and now it has reached 87.4 million in the third quarter.

They are also relaunching that brand under the umbrella of " SofiTech Solutions" . However, the second reason is that future prospects look better when looking further ahead. I remember that in the second quarter, the market punished Sophie because, despite raising sales forecasts, they did not raise their annual profit forecasts.

But this time, in my opinion, the administration did not hesitate to reveal its ambitions.

They have raised their full-year revenue forecast again from their previous range of 4.75 to 4.85 billion to 5.04 billion, more than 5 billion, which means 40% year-over-year growth, which is very strong.

As for adjusted earnings before interest, taxes, depreciation and amortization, they raised them to 1.66 billion, which translates to a massive 57% year-on- year growth, with earnings per share forecasts of 61 cents, which also represents 56% growth.

But it didn't stop there . For 2027 , they also expect a further 27% increase in sales to $ 6.4 billion, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rising 35% to $2.24 billion .

They expect adjusted earnings per share to be even higher, growing 48% year-on-year to 90 cents per share, significantly higher than analysts' estimates of 82 cents. Therefore, they easily exceeded their expectations as well.

Again, the most important takeaway from all this is that revenues are expected to grow by 27%, but earnings per share will grow much more, approaching 50%. This means that the large margin expansions we are seeing now will continue to rise and outshine in the future.

Because as their business expands, I think you will see that they are able to achieve much greater profitability over time. This is the most optimistic argument I have ever made about Sophie; it lies in the profit potential that I have always felt the market was overlooking.

Okay, that now leads me to the third reason . The unstoppable competitive trench , the comprehensive customer experience, and the incredibly strong core business of SoFi. Because none of those financial figures happened by mere chance.

This is the direct result of what SoFi calls its Productivity Loop.

As SoFi’s popularity has grown, their brand awareness has more than doubled unaided since 2022 to an all- time high of nearly 12%, and this organic brand recognition is what has helped bring in a record 1.2 million new members in the last three months alone.

Man , I'm just struggling to get any members to our Discord platform. By the way, you should register if you haven't already . Sign up, become members , and join our Discord server.

Um, we're not going to get numbers like SoFi that go over a million and a quarter, but you know, it's a fun place to be and spend time with other like-minded investors. I would like to see you there.

Therefore, the links are below. Sign up on Patreon. I didn't plan this little announcement, by the way. I just think I probably shouldn't keep talking about it for so long. But let's get back to the report.

They have added a record 1.2 million new members in the past three months alone. This has led to a 35% increase in their total user base, now exceeding 17 million users.

And better still, you know, once people join, they don't just open a checking account and then leave. They actually stay and register for more products over time. Because when you look at the numbers here, more than half of all the new products acquired in the last quarter actually came from existing members who added things like a credit card, getting a loan, using SoFi Invest, investing in different areas, or maybe signing up for a retirement account (Roth IRA), and things like that .

This accelerating effect has pushed the average number of products per member to an all-time high, with CEO Anthony Noto stating that they see a clear path to reaching 100 million total products by 2030, which is a fourfold increase from today. I mean, that would be enormous .

Now, what is operating this machine entirely is SoFi itself as an official national bank , which means they can hold their members' deposits and use them themselves for their own products as well.

In this last quarter, those member deposits jumped by nearly $6 billion to exceed $51 billion in total. The result now is that 93% of all Sofi loans are funded directly through Sofi's own, much less expensive customer deposits.

This is instead of having to use expensive "Wall Street" debt. This saves the company huge amounts of money in interest, fees and other things, which helps to push those good margins we talked about earlier to record levels.

And I believe, once again, that this will only continue in the future. Speaking of the future , that leads me to the fourth reason, which is Sofy’s continued product innovation, as they expand far beyond their roots in student loans to include high-margin cryptocurrencies, stablecoins, business banking, and even artificial intelligence.

In the past few quarters alone, they became the first bank to launch cryptocurrency trading for consumers and issue their own cashback stablecoin, "SofyUSD," and were the first to do stablecoin settlements across the global Mastercard network, which is huge and very important.

They have just launched "Sofie Earn," the first and only tokenized deposit issued by a bank to ordinary consumers . They partnered with Payworld to link traditional banking directly to digital asset markets , and launched SofiPay using blockchain technology to allow members to send international money transfers to more than 30 countries at a much lower cost .

In the field of artificial intelligence, they launched " Sofi Coach," an AI- powered financial assistant directly integrated into the application. In commercial banking, they launched small business loans and 24/7 cash and cryptocurrency banking services for businesses of any size.

When you put all these new releases together, they give Sophie more fee-based revenue engines that they can rely on in the long run. These are sources of revenue that traditional, old-fashioned banks cannot match, and in many cases do not even try.

This is really one of the things I love most about SoFi and what I feel sets them apart as innovators in these traditional markets: the fact that they are always ready to try new things, to expand, to grow, and to make radical changes while traditional banks sit idly by, unconcerned, and just trying to collect the same old profits they are used to, but are not looking to expand or grow any further.

Sophie is not like that. This is the real reason why I feel that they are indeed true innovators in these traditional markets.

Speaking of traditional markets, we conclude with the fifth reason, which is that " Sofi" is still trading at a very low valuation, a valuation usually reserved for old banks, but with tremendous growth that those banks could only dream of .

For example, even after the price surge this week following the earnings report, Sofia's stock is still technically about half its total value from its peak. This made the price-to-earnings-to- growth (PEG) ratio, which takes into account future growth, their strongest asset already, which is their growth.

That's what sets them apart from others. Well, when you take that into account when evaluating, you get a PEG ratio that stands at an incredibly low level of 0.65. We consider a PEG ratio at one level to be an excellent value.

This ratio is 0.65. It is far below any level at which we might value the stock. It is also about 40% cheaper than the sector average.

Once again, the financial sector has always been one of the cheapest sectors in principle. So, the fact that Sophie is even lower than that simply tells me that the market is still overlooking all the future potential that Sophie already possesses.

I truly believe that in the future, in the long term, this stock should exceed $30 per share. I think, you know, that they can easily get over it again, in my opinion. And we hope, as you know, that it will be much higher than that in the long run .

I understand that there may have been some restraint on the stock due to the weak economy, all the fluctuations in the economy , and a lot of other things that are going on. I think that put a lot of pressure on a stock like this, which is almost entirely dependent on finance and the economy.

But that's why I try to stick to long- term investing. I really don't care what happens this year. Sophie's stock could drop to $5 per share . I don't care about that at all . In fact, I would welcome that because I would like to buy Sofi shares, which are in the singles.

As you know, again, I would like to be able to get it at very low prices that we haven't seen in a very long time . So , this doesn't really matter to me.

again, I would like to be able to get it at very low prices that we haven't seen in a very long time . So, this doesn't really matter to me. This is a stock I want to hold onto for many years to come.

I'm talking about the very distant future , even a decade from now. It's really a stock I'd like to hold onto, ideally until retirement. I mean this long-range, because that's how much potential I think they have .

Now, it is clear that things can always change at any moment. So, you know, we're reassessing all the time, aren't we? Things can certainly change. Management can mess things up, and we may have to exit the stock and move to another stock .

All these kinds of things are always on the table. There are always exceptions to all of this.

But I'm just saying from where I am now, from where I see things and where this company is headed, I remain as optimistic as ever . I mean, nothing has happened that has made me less optimistic about Sophie's future.

In terms of everything that has happened, I am very optimistic about their long-term future.

But hey, these are just my own thoughts and opinions. Of course, I could be wrong about any of this. So, as always, you need to do your own research and due diligence. Make your own market decisions that best suit you and your investment portfolio .

But I'd love to hear your opinion on "Sophie" in the comments below. What do you think of their profits? Do you own the stock? Are you buying the stock? Or are you distancing yourself from him completely? What do you think of their profits?