Which Fintech Stock Offers Better Long-Term Growth Potential: SoFi or Robinhood?

The fintech sector’s rapid evolution has created a stark divide between companies prioritizing sustainable growth and those chasing speculative hype. For long-term, risk-aware investors, the choice between SoFi (SOFI) and Robinhood (HOOD) hinges on valuation realism, fundamental strength, and the credibility of future catalysts. While Robinhood’s token-driven narrative and aggressive expansion have fueled sky-high expectations, SoFi’s improving fundamentals, lower valuation multiples, and post-stimulus recovery positioning make it the more strategic buy.

SoFi: A Case for Valuation Realism and Diversified Growth

SoFi’s second-quarter 2025 results underscore its transformation into a diversified fintech leader. Adjusted net revenue surged 44% year-over-year to $858 million, driven by a 72% jump in fee-based revenue to $377.5 million [1]. This growth stems from a robust Loan Platform Business, referral fees, and interchange revenue, reflecting a shift toward recurring income streams. The company’s member base now totals 11.7 million, with 35% cross-buy rates for new products, demonstrating strong customer retention and product stickiness [1].

Valuation metrics further highlight SoFi’s appeal. At an EV/Revenue of 10.4x–12.2x and EV/EBITDA of 34.1x [3], SoFi trades at a steep discount to Robinhood’s 26.85x EV/Revenue and 58.9x EV/EBITDA [4]. These multiples suggest the market has yet to fully price in SoFi’s accelerating revenue growth (32% LTM) and 29% adjusted EBITDA margin [1]. Crucially, SoFi’s P/E ratio of 49x [5] is significantly lower than Robinhood’s 54–71.6x range [4], aligning it closer to the fintech sector average.

Future catalysts for SoFi include blockchain-enabled international money transfers and AI-driven tools like “Cash Coach,” which enhance user engagement and open new revenue avenues [1]. The company’s post-stimulus positioning is also critical: as consumer spending normalizes, SoFi’s diversified product suite—spanning loans, banking, and wealth management—positions it to capture market share from legacy institutions [3].

Robinhood: Hype vs. Substance in a High-Valuation Play

Robinhood’s Q2 2025 results are undeniably impressive: total net revenues rose 45% year-over-year to $989 million, driven by a 65% surge in transaction-based revenues and a 99% increase in platform assets to $279 billion [2]. Adjusted EBITDA grew 82% to $549 million, and the company’s 48.8% net income margin [6] underscores its profitability. However, these metrics mask a valuation that appears stretched.

Robinhood’s EV/Revenue of 26.85x and EV/EBITDA of 58.9x [4] imply investors are paying a premium for its growth story. While product innovations like tokenization and the Bitstamp acquisition [2] are promising, they also introduce regulatory and execution risks. The company’s reliance on speculative assets—cryptocurrencies and options—exposes it to market volatility, a concern for risk-aware investors.

Moreover, Robinhood’s P/E ratio of 54–71.6x [4] dwarfs SoFi’s 49x and the S&P 500’s 22.8x [6], suggesting expectations may outpace reality. While global expansion into 30 European countries and new services like retirement accounts [2] are valid growth drivers, they require significant capital and time to scale.

The Strategic Case for SoFi

For investors prioritizing long-term stability, SoFi’s lower valuation multiples and consistent profitability (seven consecutive quarters of net income [1]) offer a margin of safety. Its 81% year-over-year increase in adjusted EBITDA to $249.1 million [1] demonstrates operational efficiency, while its 34% year-over-year member growth [1] signals strong organic traction.

Robinhood, by contrast, faces the challenge of justifying its premium valuation in a market where fintech valuations are increasingly scrutinized. While its tokenization and crypto initiatives could pay off, they also carry execution risks and regulatory uncertainty.

Conclusion

SoFi’s valuation realism, diversified revenue streams, and post-stimulus positioning make it the more strategic buy for long-term investors. Robinhood’s sky-high expectations, while exciting, come with elevated risks in a sector where hype often precedes correction. For those seeking sustainable growth with a margin of safety, SoFi’s fundamentals and realistic multiples present a compelling case.

Source:
[1] SoFi Reports Second Quarter 2025, Accelerates Net Revenue Growth to Record $855 Million, Record Member and Product Growth, and Net Income of $97 Million [https://investors.sofi.com/news/news-details/2025/SoFi-Reports-Second-Quarter-2025-Accelerates-Net-Revenue-Growth-to-Record-855-Million-Record-Member-and-Product-Growth-and-Net-Income-of-97-Million/default.aspx]
[2] Robinhood Reports Second Quarter 2025 Results [https://investors.robinhood.com/news-releases/news-release-details/robinhood-reports-second-quarter-2025-results]
[3] SoFi - Public Comps and Valuation Multiples [https://multiples.vc/public-comps/sofi-valuation-multiples]
[4] Robinhood Markets, Inc. (HOOD) EV/EBITDA LTM annual [https://valuesense.io/ticker/hood/ev-to-ebitda]
[5] SOFI [https://www.trefis.com/data/companies/beta/SOFI]
[6] Buy Or Sell Robinhood Stock? [https://www.trefis.com/stock/hood/articles/571769/buy-or-sell-robinhood-stock/2025-08-06]