Why I'm Watching SoFi as a Financials Pick I Don't Own Yet

While I don't own any shares yet, I'm becoming really interested in SoFi Technologies (NASDAQ: SOFI). The financial technology stock is down more than 30% this year and currently sits over 45% below its 52-week high. That lower price certainly makes SoFi much more interesting to me.

Here's why I don't own any shares yet and what would convince me to buy the financial stock.

Image source: The Motley Fool.

An interesting disconnect

Shares of SoFi Technologies have slumped even though the company is having a strong year. That's abundantly clear in its recently reported second-quarter financial results, where SoFi set records for total loan originations, revenue, member and product growth, and earnings. It didn't just push past its prior highs; Sofi delivered brisk growth, with adjusted net revenue soaring 40% to $1.2 billion and members growing 35% to 15.8 million. It also added a record 2.2 million products, bringing the total to 24.4 million, a 42% increase.

That's a continuation of its brisk growth in recent years. SoFi's revenue has risen from $1.5 billion in 2022 to nearly $3.6 billion last year and is on track to top $4.7 billion in 2026. Meanwhile, the company is increasingly profitable.

The financial company expects its robust growth to continue. It's targeting 30% compound annual adjusted net revenue growth through 2028 (from last year's level) and 38%-42% adjusted earnings-per-share growth during that period.

Why I haven't bought SoFi stock yet

Up until now, SoFi's valuation has kept me from buying the stock. At the beginning of the year, SoFi traded at more than 75 times earnings. That's down to about 38 times right now, which is still a bit high compared to the broader market (the S&P 500 trades at 26.5 times earnings, while the Nasdaq-100 trades at 35 times earnings).

However, on a forward basis, SoFi is becoming rather appealing. The company expects to grow its adjusted earnings per share to a range of $1.02-$1.12 per share by 2028. With the stock now down to around $18 a share, SoFi trades at about 17 times the midpoint of its 2028 earnings estimate. Even with continued contraction in the valuation multiple, there's meaningful upside potential in the coming years.

While SoFi certainly trades at a much more attractive valuation today, I'm cheap and would like to lock in an even lower initial purchase price. My target is around $15 per share. However, instead of just waiting to see if the stock drops, I plan to write put options on SoFi stock on the next big down day in the market, which could potentially enable me to buy shares at around that level.

SoFi is getting really interesting

SoFi's CEO Anthony Noto stated in the second-quarter earnings release that "2026 is shaping up to be a defining year, and our second quarter results mark a clear inflection point for SoFi." I'm starting to agree, which is why I've been taking a closer look at the stock. I plan to remain patient and see if I can get shares at my target price.

Matt DiLallo 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.