SoFi Technologies, Inc. (SOFI Quick QuoteSOFI - Free Report) shares rallied 13.4% on Oct. 27, 2026, closing at $16.40 after the company delivered stronger-than-expected third-quarter results and raised its financial outlook. The sharp recovery reflected improving investor confidence in SoFi's ability to sustain growth and expand profitability despite changing interest rates and continued uncertainty across the consumer lending market.

Despite the post-earnings surge, SOFI shares have declined 37.4% year to date. Its fintech peer Upstart Holdings, Inc. (UPST Quick QuoteUPST - Free Report) gained 3.1% during the session but remains down 45.8% this year. Meanwhile, Chime Financial, Inc. (CHYM Quick QuoteCHYM - Free Report) closed unchanged and has gained 13.4% year to date. These contrasting performances reflect differing investor expectations across digital financial services.

The rally has brought SoFi's growth prospects back into focus. Stronger earnings, expanding fee-based businesses and an improved outlook for 2027 provide reasons for optimism. However, the recent price recovery also raises questions about valuation and whether the company's growth momentum can support further upside.

Year-to-date Stock Price Performance

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SOFI's Growing Customer Relationships Drive Expansion

SoFi's growth increasingly depends on how many financial products its customers use rather than simply how many new accounts it opens. This approach continued to deliver results during the third quarter.

Membership increased 35% year over year to 17.1 million, while total products climbed 44% to 26.7 million. Existing members accounted for 51% of new product openings, suggesting that SoFi is gaining additional business from established relationships.

This broader customer engagement offers an advantage over more specialized fintech competitors. While UPST primarily connects borrowers with lenders through its AI-based platform, CHYM concentrates on everyday banking services. SoFi combines lending, savings, investments and payments, creating multiple opportunities to generate revenues from individual customers.

SOFI's Earnings Growth Reflects Improving Business Economics

Third-quarter adjusted revenues advanced 44% year over year to $1.37 billion. GAAP net income increased 73% to $241 million, while adjusted EBITDA surged 70% to $470 million. Adjusted earnings of 18 cents per share exceeded the Zacks Consensus Estimate of 17 cents.

An encouraging development was the growing contribution from businesses that generate fees without requiring SoFi to retain additional loans. Fee-based revenues totaled $570.6 million, representing 42% of adjusted revenues. Meanwhile, loan originations reached $16.9 billion, including $3.8 billion originated for lending-platform partners.

SoFi also benefited from improving credit performance, with its estimated all-in personal loan net charge-off rate declining to 3.4% from 4.2% a year earlier.

However, Technology Platform revenues fell 24% because of a major client transition. Expanding lending balances could increase exposure to credit deterioration if consumer financial conditions weaken.

Higher Guidance Offers Better Earnings Visibility

Management increased its 2026 adjusted revenue forecast to $5.04 billion from the previous $4.75-$4.85 billion range. Adjusted earnings are expected to reach 61 cents per share, ahead of the consensus mark of 60 cents.

For 2027, SoFi projects adjusted revenues of $6.4 billion and earnings of 90 cents per share, indicating continued growth and margin improvement. Management also expects to fund its planned expansion without raising additional capital.

New offerings, including the recently launched SoFi Earn tokenized deposit product, could provide further opportunities to deepen customer relationships. Nevertheless, these newer initiatives will need time to demonstrate meaningful financial contributions.

SOFI’s Estimate Revisions

While SOFI’s current projections for 2026 and 2027 EPS remain unrevised, we expect changes to these estimates in the upcoming days following its better-than-expected third-quarter earnings release.

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How Does SOFI's Forward Valuation Compare?

On a forward price-to-earnings basis, SOFI trades at approximately 21.06X compared with 14.44X for the industry, 7.75X for Upstart and 32.05X for Chime.

SoFi's premium over Upstart reflects expectations for a broader earnings base and more diversified revenue sources. However, its discount to Chime suggests that investors are not assigning the same earnings multiple to both digital banking businesses. Differences in growth prospects and business models also influence these valuations.

Although SoFi's earnings outlook is improving, its valuation is not particularly inexpensive compared with UPST. Sustained profitability and consistent execution will be important to support its current multiple.

Valuation

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What Should Investors Do With SOFI?

SoFi's strong quarterly performance and improved guidance reinforce its long-term growth potential. Rising membership, increasing product adoption, expanding fee-based revenues and improving margins suggest that the company is moving in the right direction.

Nevertheless, the recent rally, lending-related risks and uncertainty surrounding Technology Platform recovery call for caution. Its valuation also leaves less room for disappointing results.

Maintaining existing positions appears to be a reasonable approach, allowing investors to benefit from SoFi's growth prospects without increasing exposure immediately after the sharp rally. New investors may find it worthwhile to monitor valuation and upcoming results before establishing positions.

At present, SOFI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.