- SoFi is facing tough competition from large banks and major fintech players, which will limit its growth potential.
- The valuation of SOFI stock is unattractive, with a price/sales ratio of three and low profits.
- The Biden administration’s actions, such as forgiving student loans, will harm SoFi’s financial results.
SoFi is facing steep competition from banks like JPMorgan and Bank of America, as well as fintech players like PayPal and Affirm. Many of these companies have extensive apps for consumers, making it difficult for SoFi to gain market share in consumer loans and mortgages. The valuation of SOFI stock is also unattractive, with a price/sales ratio of three and low expected earnings per share. In comparison, PayPal is a better buy in the fintech space with a lower price-earnings ratio and higher profits. The Biden administration’s actions of forgiving student loans will hurt SoFi’s financial results, as it generates revenue from refinancing these loans. The administration is likely to continue forgiving student loans, especially with the upcoming election, further undermining SoFi and SOFI stock.