SoFi Technologies (SOFI) has introduced the SoFi Social 50 Income ETF, giving SoFi Invest customers a new way to access an options based income strategy bundled with a portfolio of widely held U.S. stocks.

SoFi Technologies shares trade at US$17.75 and have seen mixed momentum, with a 10.73% 1 month share price gain and a year to date share price decline of 35.36%, alongside a 3 year total shareholder return of 95.70%. This reflects how strongly sentiment has swung over time around the company’s rapid product roll out and short seller scrutiny.

If you are considering how SoFi’s new ETF fits into a wider opportunity set, this could be a good moment to see what else is moving in payments and fintech and review 19 top founder-led companies

SoFi Technologies now trades at US$17.75, sitting between a 28% premium to one intrinsic value estimate and a roughly 18% discount to the average analyst target. Which reference point looks closer to fair value as things stand?

Most Popular Narrative: 23% Undervalued

On this narrative, SoFi Technologies screens as undervalued, with a fair value of $22.98 against the last close at $17.75. This is a meaningful gap for investors watching the story closely.

Technology markets follow a repeating pattern, extreme fragmentation is always conquered by centralized aggregation. Amazon aggregated retail. SoFi is aggregating the multi-trillion-dollar financial services sector.

Curious what has to happen for SoFi Technologies to reach that valuation, the narrative focuses on strong revenue expansion, rising profitability and a richer future earnings multiple. The full breakdown shows how those pieces fit together into that fair value call.

Result: Fair Value of $22.98 (UNDERVALUED)

However, SoFi Technologies still faces risks, including higher credit losses if borrower behavior shifts, and slower adoption of its technology and SoFiUSD platforms by partners.

Another View: SoFi Technologies On Earnings-Based Valuation

That 23% undervalued fair value narrative is only one angle. On current numbers, SoFi Technologies trades on a P/E of 39.5x, while the fair ratio sits at 25.3x and peers and the US Consumer Finance industry sit at 13.3x and 8.9x. That premium points to valuation risk, not a clear bargain. Which signal should carry more weight for you right now?

Next Steps

With SoFi Technologies attracting both optimism and concern, this is a good time to move quickly, review the data, and weigh both sides for yourself with the 2 key rewards and 2 important warning signs

Looking for more ideas beyond SoFi Technologies?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.