Buying This Bank Stock Could Help Make You a Millionaire Retiree

Many of us are hoping to become millionaires by retirement -- if not multimillionaires. If you're such a pre-retiree and you're on the hunt for promising growth stocks that could help you build your portfolio to seven figures, permit me to introduce you to an impressive one -- SoFi Technologies (NASDAQ: SOFI).

To whet your appetite, let's start with its performance in recent years.

Source: Data from Morningstar.com as of Jan. 22.

Image source: Getty Images.

If it can maintain anything like that kind of pace, it stands a chance of making its investors much wealthier if they give it enough time and are diligent in their investing. Here's how your money might grow, if the stock grows at just 15%, on average, over the coming years.

Source: Calculations by author via Investor.gov.

That's all speculation, though, because no one can know just how SoFi Technologies (or any other stock) will fare over the next few decades. Here's some more about it, though, to inform your thinking and decision-making.

SoFi Technologies is a fintech business that primarily caters to millennials and other youngish consumers. In its early years, it specialized in helping young people with student loans. Now, it's a fully online bank that aims to be a one-stop shop that can handle all the financial services needs of its members -- who numbered 12.6 million at last report. It offers services related not only to banking but also to investing, credit cards, mortgages, private student loans, and insurance.

Its ambition and the growth of its offerings bode well for the company, considering that a Motley Fool Research report from 2024 found that around three-quarters of consumers would be likely to switch banks if they found one with offerings that better suit their needs. And by offering so many services and a convenient digital platform, SoFi may be able to do a better job than some of its rivals at keeping its customers around once it lands them.

The bank has been growing at a good clip. Here are some highlights from its third quarter's press release:

• Adjusted net revenue rose 38% year over year to a record $950 million.
• Adjusted EBITDA rose 49% to a record $277 million.
• Fee-based revenue rose 50% to a record $409 million.
• Member growth rose 35% to a record 12.6 million members.
• Product growth rose 36% to a record 18.6 million.
• Management raised its guidance for 2025.

My Motley Fool colleague, Matt Frankel, has noted that while mortgages are not a big part of SoFi's business right now, they represent a lot of growth potential. If interest rates for home loans drop more, as many expect they will, that could give the housing market a boost, and if SoFi can cross-sell mortgages to its millions of established customers, that could be a win-win.

The main caution I would offer relates to the stock's valuation. It's trading at a price-to-sales ratio of around 9.5, which is far above its five-year average of 4.3, so the shares aren't exactly cheap. With that in mind, interested investors may want to wait for a better price, or build up a stake over time by buying shares gradually.

Selena Maranjian has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.