Summary SoFi stock returned roughly 70% in 2025, then pulled back about 12%, forming a constructive consolidation rather than trend deterioration. SoFiUSD represents a strategic pivot into regulated financial infrastructure, enabling capital-light, high-margin, non-lending revenue expansion. Stablecoin reserves held at the Federal Reserve allow SoFi to earn interest with minimal credit or liquidity risk. Capital-light revenue already reached 56% of total revenue, with SoFiUSD potentially pushing this mix beyond 65% by 2026. Elevated valuation multiples place pressure on Q4 and 2026 execution, as dilution and weak operating cash flow remain key risks. Investment Thesis SoFi Technologies, Inc.’s ( SOFI ) 2026 bull case is reinforced by strong market performance and a timely reset. The stock delivered around 70% returns in 2025, materially outperforming the broader market. Since my last coverage , SOFI has pulled back roughly 12%, which I view as a constructive consolidation rather than a breakdown. Combined with the launch of SoFiUSD and its capital-light, high-margin revenue potential, this pause may be setting the foundation for the next leg higher as fundamentals expand. Data by YCharts SoFiUSD May Push Capital-Light Revenue Beyond 65% by 2026 I observe an important positive aspect in SoFi's recent developments that points to a new operational dimension for its business model. This is centering on SoFi’s move to become a financial infrastructure provider. Major development here is the announcement of the SoFiUSD stablecoin . Looking toward the Q4 earnings report and beyond, this move is a pivot from being a direct-to-consumer financial services application to also being a business-to-business enterprise platform. This move establishes a new potentially high-margin, capital-light topline that leverages SoFi’s most distinct asset, its national bank charter. SoFiUSD is a fully reserved US dollar stablecoin issued by SoFi Bank. Based on Q3 2025, if the capital light portion of their revenue (Financial Services and Technology Platform) is $534 million , which is approximately 56% of total revenue, achieving a 65% mix on the same revenue base would mean capital light revenue of approximately $617 million, leaving a difference of $83 million, a 16% increase. Q3 Earnings The bridge is not dependent on SoFi USD. The Loan Platform Business itself, which brought in $168 million in Q3, with an ARR exceeding $660+ million, is also a capital light and a fee-driven business. These two factors could potentially increase the contribution from 56% to 65% by 2026 with moderate adoption. The mechanics of this are central to my bullish thesis. The reserves backing the stablecoin are held as cash in SoFi’s federal bank account. This structure may lead to a level of security that eliminates both liquidity risk and credit risk for the reserves ( in a booming market ). It is a claim that entities without a national bank charter cannot make. IMG Also, as an entity dealing within the digital assets sector, the presence of such regulatory certainty and institutional security is a substantial differentiator. SoFi earns interest on stablecoin reserves held with the Federal Reserve. Under the assumption of about 3.5%, SoFiUSD balances worth the range of 2-5% of SoFi’s approximately $33 billion deposit base would mean reserves ranging between $0.66 billion and $1.65 billion and approximately between $46 and $115 million. An important point is that the revenue is mainly focused on partnering incentives instead of being directly channeled to profitability. Because SoFiUSD reserves are fully matched by an equivalent liability to stablecoin holders, they expand SoFi’s balance sheet symmetrically without materially increasing credit risk, risk-weighted assets, or equity capital requirements. SoFi’s monetization is more likely to come from transaction fees and B2B infrastructure revenue. The network effect therefore stems from volume and stickiness, as each new partner increases transaction activity and fee revenue, while stablecoin usage anchors clients to SoFi’s settlement and treasury stack. The Street also has not yet integrated the potential growth from SoFiUSD integration in SoFi’s topline, as I see no positive change in analysts estimates for Q4 . Q3 Earnings Moreover, this is like launching another product for its existing 12.6 million members . I think the intention for SoFiUSD is to enable SoFi to be a stablecoin infra provider for banks, fintechs, and enterprise-level platforms . This expands SoFi’s TAM largely. The stablecoin may also support settlement for card networks, retailers, and other businesses seeking 24/7 transactions at a lower cost. This pushes SoFi as a competitor to consumer banks based on being a foundational tech layer for other financial and non-financial companies. I see this leads to a much larger and larger market for SoFi. This move directly addresses a core issue in SoFi’s financial metrics. The profitability metrics like TTM cash from operations is a negative $2.95 billion . Here, the stablecoin business, is a capital-light and fee-based operation. It derived revenue and cash from transaction fees and the interest spread on reserves without putting SoFi’s own capital at risk in the same way lending business does. Post Q3-FY25, I mentioned the growing importance of capital-light revenue and pointed out that the Financial Services and Tech Platform segments derived 56% of total revenue. The stablecoin infra business is a direct extension of this operational focus. It diversifies income away from net interest margin from lending and moves it toward highly predictable scalable high-margin service fees. Q3 Earnings For the Q4 earnings, I will be looking for initial commentary on the adoption and progress of SoFiUSD. Even early indications of partnership deals and transaction volumes can reshape the market sentiment around SoFi stock. How? It changes the valuation from one based purely on consumer member growth and loan originations to one that includes enterprise software and transaction processing multiples. I think this new business line has the capacity to alter SoFi’s financial profile by boosting its non-lending revenue mix, improving overall margins, and deriving positive operating cash flow over the long term. This is a catalyst that was not present in the Q3 but may be a central point of inquiry for the Q4-FY25 and FY26 outlook. Why SoFiUSD Competes on Regulation, Not Scale SoFiUSD launches in a competitive environment where USDT and USDC are the leading stablecoins. The competitive advantage in the USDT and USDC stablecoins is size. The unique aspect about the launch of the SoFiUSD stablecoin is in its positioning, as opposed to its distribution. This stablecoin is bank-backed, a stablecoin created under a regulatory framework, as opposed to the existing stablecoins in the marketplace. Unlike USDT and USDC, which are issued by crypto-native firms or private consortiums, SoFiUSD is issued directly by a federally chartered bank. This means they are more focused on partnering with institutions who wish to harness the power of stablecoins rather than developing them in-house, remittances focused on compliance and speed of settlement, and perhaps even a payments/payment card network exploring using stablecoins instead. The best-case scenario isn't about capturing market share, but rather about the adoption of stablecoins in a more limited sub-niche. Q4 Must Outperform 70x Forward P/E Amid Repricing Risk The concern I find problematic for Q4 is the disconnect between SoFi stock’s market valuations and its current profitability and cash flow metrics. SoFi stock price appears to be based on flawless high-speed growth. This is creating a high-stakes environment for the upcoming Q4 report. The current market price of $26 seems to have fully priced in the strong Q3 results and upwardly revised guidance for 2025. Here, for the stock to appreciate further, SoFi must meet these elevated expectations at least and exceed them meaningfully. Any sign of deceleration presents a risk to the stock price downside due to the thin margin of safety afforded by its valuations. SoFi stock has a TTM P/E Non-GAAP of 90.09x against the sector median of 11.91x. The forward P/E non-GAAP is 73.21x, against the sector median of 11.48x. This points out that the market is paying a premium of more than 6-7 times for SoFi stock compared to its peers. The TTM Price/Sales ratio of 9.1x is nearly triple the sector median of 3.2x. These multiples suggest that upcoming growth is expected to be extraordinary and stable. This level of Street optimism makes SoFi stock vulnerable to downside shifts in sentiment. The Q4 report and the outlook for 2026 now carry the burden of justifying SOFI’s premium valuation. A big surprise may happen based on the historical pattern of large surprises in Q4s of 2023 and 2024. seekingalpha.com Furthermore, these high valuations are set against a weak underlying profitability. SoFi’s TTM ROCE is 8.59%, below the sector median of 10.90%. Whereas, SoFi’s business is not deriving cash from its core operations and is consuming capital to grow. This is common for high-growth companies, but I think it presents a risk as the Street is overlooking the current cash burn in anticipation of profits. If the timeline for stable positive operating cash flow is extended and if the growth in cash-burning segments outpaces cash-generating ones, the Street’s patience may become thin. Finally, the $1.5 billion public stock offering in early December complicates things here. The offering was priced at $27.5 per share, close to the current price. This action strengthened the balance sheet with an additional $1.5 billion in gross proceeds, but increased the number of outstanding shares by 54.5 million (before the underwriter's option). This dilution makes EPS growth more difficult to hit. The already high P/E ratio must now be justified against a higher share count. I think it is putting even more pressure on SoFi to deliver high net income growth in Q4-FY25 and FY26. Takeaway SoFiUSD reframes SoFi from a growth-dependent lender into a capital-light financial infrastructure provider. If adoption materializes, margins, cash flow, and valuation logic all change. The key risk isn’t demand, it’s timing. Early traction could force a rapid repricing as the market shifts from consumer fintech to regulated fintech platforms.
