SoFi Stock—Is The Steep Sell-Off Overdone?

It’s been a miserable year for the fintech stock, but could recent losses for SoFi present a buying opportunity for investors? 

On the surface of things, there appears to be little to get excited about for the challenger bank. Almost 50% adrift from its 2025 highs, SoFi (NASDAQ:SOFI) has been caught in a downward trend that’s spanned much of the past 11 months. 

When it comes to the technical outlook for the stock, there’s also little cause for optimism. Trading below its 20, 50, and 200-day simple moving averages (SMAs), the stock is still entrenched in ‘sell’ territory. 

Critically, SoFi’s 42.75% decline in the first three quarters of 2026 is significantly steeper than the wider industry. During the same period, the ARK Blockchain & Fintech Innovation ETF (BATS:ARKF) remained relatively stable, recording a loss of 2.13%. 

So, what challenges is SoFi facing? And can the stock’s top-line growth help to overcome its recent headwinds? 

Uncertainty Takes Toll

Fears that SoFi has been impacted by a $1 billion headwind in Q3 that’s linked to interest rate changes, fair value accounting dynamics, and rapid balance sheet growth are among the largest contributors to the downturn. 

This is because of the way that the company marks its loans and assets to market, which is combined with more expensive funding and rapid loan growth, which can drag on reported earnings while eroding capital buffers. 

As a result, there are tangible concerns that capital levels may thin out, which can make the market nervous when it comes to lenders. 

One of the biggest challenges that SoFi faces, according to Timothy Switzer, an analyst at Keefe, Bruyette & Woods, is that the company’s fair value accounting leaves very little room to meet guidance as rates continue to rise. 

Switzer claimed that unless the company draws down capital at a faster pace, SoFi’s fair value accounting means the company is likely to continue to underperform. 

The analyst revised his price target for the stock down to $15 from $16 as a result of the pressures. 

Revenues Reveal Opportunity

While SoFi’s technical performance is certainly a cause for concern, the fintech firm’s fundamentals reveal a more optimistic tone. 

In the company’s second quarter, adjusted revenue rallied 40% towards a record $1.2 billion, representing a beat on estimates of $1.12 billion. We also saw membership rise 35% to 15.8 million, while loan originations reached a record $14.8 billion. 

Even as investors sold the stock, SoFi raised its full-year revenue outlook to between $4.75 billion and $4.85 billion. Despite this, the challenger bank’s adjusted profit forecast was held at 60 cents a share. 

According to a recent poll, SoFi still has a wide range of analysts who admire the stock, with 38% of respondents remaining bullish on the stock. Of the analysts polled, 45% have a Hold rating on the company. 

Should SoFi’s strong fundamentals support a trend reversal in Q4 2026, we’re likely to see its 40-day moving average of $17.07 become a key resistance level to test. Should the stock rally higher, a recovery of more of its annual losses could be on the cards. 

Growing Relevance in Fintech

Another reason for investors to gain optimism in SoFi is the company’s key role in the rapidly expanding fintech landscape. 

McKinsey data suggests that the global fintech market generated around $650 billion in revenues last year, representing a growth rate of around 21% over the previous 12 months and 23% throughout the past four years. 

SoFi’s key role in this evolving landscape puts the stock at the forefront of a growing frontier that’s building new use cases on a regular basis. 

The launch of SoFi’s dollar-pegged SoFiUSD stablecoin, a digital currency that’s available to almost 15 million users on the company’s app, this year is a strong indication of intent for the company’s scaling ambitions. 

SoFi was the first national bank to offer a stablecoin on a public blockchain, and its first mover status within its industry will help to inspire investors cycling money out of the AI boom and into a more diversified range of tech firms in the coming months. 

Is SoFi a Buy? 

SoFi still has plenty of challenges to overcome as the rate environment becomes increasingly restrictive, but there’s plenty of evidence that the stock has been oversold based on its appealing fundamentals and strong stream of innovations. 

Whether a trend reversal is imminent or not, the company itself seems optimistic about a record-breaking year in terms of revenue beats. Whether this can revive confidence among investors is yet to be seen. But for a company that’s recorded a 40% boost to its adjusted revenue, an underperformance of 50% in 2026 seems a little harsh.

Disclosure: On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer. Dmytro Spilka does not intend to make a trade in any of the securities mentioned above in the next 72 hours.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.