The Fall.
Unsure if you have noticed but $SoFi Technologies Inc.(SOFI)$ has recently taken a beating.
It happened around Fri, 5 Dec 2025.
The fall was a direct reaction to the company’s announcement on Thu, 4 Dec 2025 (after market closed) that it planned to sell $1.5 billion in new common stock (an equity raise).
Shares dipped over -6% immediately in after-hours trading.
When trading resumed on Friday, it opened approx. -7.3% lower, due to shareholder dilution. (see below)
This is because the new shares were priced at a discount of about -7% (at $27.50 per share) compared to prior day's close of $29.60 per share.
From 05 Dec 2025 to 17 Dec 2025, SoFI has fallen by -9.04% (-$2.51) to $25.27 per share.
The Action.
Many were stumped by SoFi’s Management action course. Why ?
When I look at the ‘enlargement’ decision through the lens of SoFi's long-term goal — that is to attempt to catch up with the "big boys" eg. $JPMorgan Chase(JPM)$ and $Bank of America(BAC)$, issuing new shares is both logical and necessary.
Here’s why I feel so !
Market Cap Comparison.
SoFi's current market capitalization is tiny compared to these giants, that are many times its size. (see below)
As of Fri, 12 Dec 2025
To even consider mounting a decent competition, any regulated bank needs massive amounts of regulatory capital on its balance sheet to back up a rapidly growing loan book.
By raising $1.5 billion, SoFi is securing the ‘necessary’ capital required to dramatically scale its lending and invest heavily in its technology platforms (eg. Galileo) to eventually become a "Top 10" financial institution.
The core philosophy here is the financial institution management accepts short-term share price pain (dilution) for the long-term benefit of accelerated growth and financial stability.
✅The Proofs.
SoFi’s latest Q3 2025 results are solid proofs that the ambitious growth path is working. (see below)
(1) Spinning Ecosystem:
-
SoFi hit a record 12.6 million total members and 18.6 million total products, showing over +35% YoY growth in both metrics.
-
This confirms their strategy of getting members to use more than one product is working, lowering customer acquisition costs in the process. (see below)
(2) Business Diversification:
-
So far, SoFi achieved its 8th consecutive quarter of positive GAAP net income.
-
It also reported record Adjusted Net Revenue of $950 million.
-
Most importantly, the non-lending, fee-based business segments are surging, with Technology & Financial Services Revenue growing +57% YoY.
-
The diversification makes SoFi overall business more resilient and less reliant on volatile loan originations.
(3) Operating Efficiently:
-
For Q3 2025, SoFi recorded (adjusted) EBITDA of $277 million.
-
And a 29% margin, proving that SoFi is growing revenue faster than costs, a sign of a highly scalable, profitable business model.
Stock Price Movement.
Based on the chart and recent market data from December 2025, SoFi Technologies (SOFI) has had a transformative year characterized by a powerful "hockey stick" recovery followed by a recent, sharp consolidation.
1. Price Movement: The "J-Curve" Rally
The overall shape of the YTD movement is a classic steep recovery.
-
The Slump (Q1-Q2): SoFi started 2025 in a downtrend, hitting a 52-week low near $8.60 in April. The "shape" was a rounded bottom that lasted through early summer.
-
The Breakout (Q3-Q4): Beginning in July, the stock entered a massive parabolic run, skyrocketing over 200% from its lows to a 52-week high of $32.73 in November. This was driven by record EBITDA and its transition from a "fintech" to a profitable "national bank."
-
Current Correction: Since late November, the "shape" has turned into a sharp pullback, with the price dropping toward the $25.00 level.
2. RSI (Relative Strength Index) Analysis
-
Peak Overbought: During the November rally, the RSI likely pierced the 70–80 range, signaling the stock was severely overextended.
-
Current Cooling: As of mid-December, the RSI has cooled significantly to around 39.83. This indicates that the "froth" has been washed out, moving the stock from overbought territory into a neutral zone.
3. Trading Volume & Market Sentiment
-
Volume Spikes: The massive volume bars during the October/November ascent confirmed strong institutional accumulation.
-
Selling Pressure: Recent volume has remained high (averaging ~50–70 million shares), but it has been dominated by distribution (selling).
-
The "Offering" Catalyst: A major driver of the recent December dip was a $1.5 billion public offering of common stock. High volume on down days suggests investors were reacting to the dilution and a potential "head and shoulders" technical pattern forming near the $32 resistance.
📊 The Analysts Consensus.
The crucial question is whether SoFi’s recent fall from grace, is a sign of deeper trouble OR just a blip on its growth trajectory.
Analysts’ Ratings :
Based on projections from approximately 17 analysts, current, overall consensus rating for SoFi is "Hold" (as of early December 2025). It shows caution but not alarm.
Breakdown analysis on some analysts’ ratings:
-
Morgan Stanley is pessimistic side, with a price target of $18, arguing that the stock valuation has overtaken itself.
-
Goldman Sachs hiked its target to $27 and retained a “Hold” rating, impressed by the revenue beat but being concerned about the look of a rich stock post-run.
-
Mizuho raised its target to $38 on the bullish side, with a “Buy,” citing SoFi's growth story and underlying fundamentals, along with its long-term revenue profile, are difficult to ignore.
-
Needham is also positive, with a $29 target, as financing conditions are more favorable, the refinancing trend is strong, and SoFi's broader potential in the financial ecosystem is greater.
Price Target is Near the Dip:
-
The average 12-month analyst price target is around $26.97.
-
SoFi has fallen close to this average price target after the offering was announced, implying that while SoFi had a massive rally (over +92% YTD before the offering), analysts view the current price range as a fair valuation, given the growth expectations.
Long-Term Outlook:
-
Despite the immediate stock ‘weakness’, financial institutions like JPMorgan and William Blair, maintained positive views.
-
William Blair even suggest investors "scoop up on weakness", arguing that the strong growth story remains intact.
In short, analysts are not panicking. They see the dilution as a short-term headwind and remain cautiously optimistic due to the strong financial results.
Personally, I am strongly believe SoFi’s CEO Anthony Noto is doing a fine job at propelling the fintech bank into a Top10 financial institutions.
His wealth of working experiences will help him navigate SoFi towards an achieveable goal. (see below)
-
Chief Operating Officer (COO) and Chief Financial Officer (CFO) at Twitter.
-
Co-Head of Global Technology, Media, and Telecom Investment Banking at $Goldman Sachs(GS)$ .
-
CFO of the National Football League (NFL).
Already, SoFi share price has recovered some of the lost grounds.
Like any other listed stocks, it will still be ‘affected’ by market sentiments, that is looking shaky this week as the latest inflation numbers will be published.
Are you confident that under Noto’s stewardship, SoFi will continue to grow and bring value to investors? I am …
Due to creative differences and bias, I will scale back my posting.
My 2,430 ‘timeless’ posts remain available (for now) for those who value fundamentals as Mr Buffett had pointed — invest in businesses, not pick stocks.
To new subscribers, no flashy screens to entice blind investing. I aim to share on how to fish, not fish for you.
I’m grateful to share what I know. In the alternate moo moo universe, where I am valued & appreciated, I will still be sharing. Good luck on your i-journey.
Remember to check out my other posts. (See below). Help to Repost ok, Thanks.
Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.
-
Do you think it is a right move by SoFi management team to issue additional shares and bolster reserves ?
-
Do you think underdog bank stock - SoFi will continue to grow from strength to strength ?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Comments