Prediction: SoFi Won't Stay This Low Forever. Here's Why It Is Due For a Rebound.

Last year, SoFi Technologies (NASDAQ: SOFI) looked as if it had finally turned a corner. The fintech company's shares rallied by 70% in 2025, but most of those gains have evaporated amid a 34% year-to-date decline.

However, this drop came amid strengthening fundamentals, which makes a rebound more feasible. It's only a matter of time before investors recognize the opportunity and accumulate SoFi shares at a discount.

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SoFi's membership continues to grow

SoFi offers a wide range of financial products that keep people engaged in its platform. While SoFi can continue to boost its average revenue per user, the company is still attracting new members.

The company reported a 35% year-over-year increase in its total members. More than 1 million new members joined, bringing the total to 14.7 million. SoFi CEO Anthony Noto cited the company's entry into digital assets as a catalyst, but the "strong growth in existing businesses" also played a role.

A larger member base translates into higher revenue and net income growth rates. That was certainly the case in the first quarter, when revenue surged by 43% year over year, and net income more than doubled. Guidance implied 30% year-over-year revenue growth in the second quarter, and that the company would deliver at least 30% year-over-year membership growth in full-year 2026.

The valuation is still reasonable

SoFi's year-to-date losses would make more sense if it had a high valuation or exhibited declining growth rates. The latter scenario has already been disproven. Strong fundamentals and a waning stock price have also made the valuation more attractive.

The fintech company only trades at a 0.82 price/earnings-to-growth (PEG) ratio. A PEG ratio under 1 is typically viewed as undervalued, and it wasn't that long ago when SoFi had a PEG ratio above 2. This metric anticipates a company's projected growth rates rather than factoring only the current stock price and earnings.

SoFi also has fewer constraints than traditional banks, which can translate into higher profit margins in the future. Since SoFi does not have physical branches, it avoids many of the real estate costs that plague financial institutions. Lower costs help SoFi offer more competitive rates and terms for its financial products.

Fintech peer Robinhood Markets (NASDAQ: HOOD) is also aiming to provide financial products and services that can serve people's day-to-day needs. Robinhood Banking will come out soon and touts itself as "the new gold standard in banking."

That's important because Robinhood trades at a much higher premium than SoFi. Robinhood's 48 P/E ratio is well above SoFi's 38 P/E ratio. While the companies have some differences, the valuation gap and SoFi's recent growth rates suggest its P/E ratio can be extended a bit. SoFi's upcoming Q2 earnings report may provide the spark that the stock needs to get out of its funk.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.