SoFi Technologies is an odd case. Most stocks we cover have a business problem, a price problem, or both. SoFi has neither and both at once: the business is firing on nearly every cylinder, and the stock is still down about 31% for the year.

Start with what’s going right. In the first quarter, SoFi posted record adjusted revenue of $1.1 billion, up 41% from a year ago — and that growth rate is accelerating, not slowing. Net income hit $167 million, up 134%. Loan originations reached a record $12.2 billion, up 68%. Membership grew to 14.7 million, up 35%. This is now SoFi’s tenth straight quarter of GAAP profitability, a real turnaround from its cash-burning startup days. Management reaffirmed full-year guidance for roughly 30% revenue growth.

So why is the stock down? Because even after falling from a 52-week high of $32.73 to around $18, SoFi still isn’t cheap. It trades at 35 to 41 times trailing earnings and about 2.1 times book value — a real premium over the traditional banks and consumer lenders it increasingly competes with, many of which trade at low-double-digit earnings multiples and near book value. Two independent valuation models, from GuruFocus and Simply Wall St, both flag the stock as overvalued even at today’s price. Their logic: SoFi still only earns a fairly ordinary 9% return on equity, the kind a mature bank produces, not the kind that usually justifies a growth-stock multiple.

SoFi makes money three ways. Lending is the biggest piece, 58% of revenue, built on personal loans, student loan refinancing, and home loans. The company earns interest on loans it keeps, plus fees from loans it originates and sells to other investors — a lower-risk model it’s leaning into more each quarter. Financial Services, the fastest-growing segment at 39% of revenue, covers checking and savings accounts, brokerage, credit cards, and a recent return to crypto. The weak spot is the Technology Platform business, SoFi’s banking-infrastructure arm, where revenue fell 27% after a major client left. Management points to new client wins as a fix, but it hasn’t shown up in the numbers yet.

The most attractive part of the story is funding cost. SoFi holds a national bank charter, letting it fund loans with customer deposits instead of expensive warehouse financing. Deposits now cover over 90% of its liabilities and run about 1.55 percentage points cheaper than the alternative — real, structural savings that show up directly in its 5.94% net interest margin. The company is also well capitalized, with a 21% total capital ratio, giving it real room to absorb losses if things go wrong.

And that’s the risk worth sitting with. SoFi is, underneath the fintech branding, a lender. Most of its loan book is unsecured personal debt, built during a period when consumer credit has stayed unusually healthy. It has never been tested by an actual recession. Management says credit quality remains strong, and there’s no reason to doubt that today — but “untested” is doing real work in that sentence. A downturn that hits jobs and incomes hits SoFi’s loan book directly, in a way that can’t be predicted from current data.

CEO Anthony Noto, a former Goldman Sachs banker, has run SoFi since 2018 and deserves real credit here. He steered the company through the student-loan payment freeze, landed the bank charter in 2022, and delivered the profitability turnaround investors are seeing now. That said, a few things temper the enthusiasm: insiders have been net sellers of stock over the past few months, and some of SoFi’s newer product launches — a stablecoin, an income ETF, AI investing tools — can feel more like headline generators than near-term revenue drivers.

Wall Street is split in a way that mirrors this whole debate. Roughly seven analysts rate the stock a Buy, twelve call it a Hold, and four say Sell, with an average price target only modestly above today’s price. That’s not a consensus screaming opportunity. It’s a consensus that agrees this is a good company trading at a full price.

That’s exactly where this call lands: Watchlist. Not cheap enough to buy aggressively today, not weak enough to avoid. If you already own it and believe in the long-term story, holding through the volatility is defensible. If you don’t, a pullback toward the mid-teens, or clearer proof that the lower-risk, fee-based part of the business keeps growing, would make this a much easier Buy.

The full financial breakdown and valuation model are in our complete SoFi (SOFI) research report, available on the Reports page.