SoFi's Tangible Book Value Growth: Can It Power a 50% Stock Surge by 2028?

The financial technology sector has seen its share of volatility, but SoFi Technologies (NASDAQ: SOFI) has emerged as a standout player, leveraging its unique position in student loan refinancing and cross-selling opportunities. With its Tangible Book Value (TBV) per share rising 17.4% year-over-year to $4.58 in Q1 2025, investors are asking: Can this growth trajectory justify a 50% stock price appreciation by 2028? Let's dissect the factors driving SoFi's valuation and the risks that could temper expectations.

TBV Trajectory: A Solid Foundation or Overvalued Start?

SoFi's TBV per share has been a key driver of its financial health. From $3.90 in Q1 2024 to $4.58 in Q1 2025, the metric reflects the company's success in growing tangible equity through deposits, loan originations, and operational efficiency.

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The company's guidance for 2025 calls for an additional $585–$600 million in TBV growth, which, if realized, would push its TBV per share toward $5.00–$5.20 by year-end. However, SoFi's current Price-to-Tangible-Book (P/TB) ratio of 3.64 is nearly triple the industry median of 1.08, raising questions about whether the stock is already pricing in future growth.

Student Loan Refinancing: A Tailwind with Limits

SoFi's core competency lies in student loan refinancing, an area where it holds a dominant 20% market share. Low-interest rates in recent years have driven refinancing activity, but this tailwind faces headwinds. Rising interest rates—expected as the Fed's current cycle matures—could reduce refinancing demand, as borrowers may seek to lock in rates before they climb further.

Moreover, competition is intensifying. Traditional banks like JPMorgan Chase and digital lenders like Earnest have entered the space, squeezing margins. SoFi's ability to retain its premium pricing and customer loyalty will be critical.

Cross-Selling: The Key to Scaling Value

SoFi's true potential lies in its cross-selling strategy. With over 3 million members, the company aims to deepen engagement by offering banking products, investing tools, and insurance. For instance, its SoFi Money account and investing platform could boost fee-based revenue, which is less cyclical than loan origination income.

The success of cross-selling hinges on execution. If SoFi can convert 20% of its members into high-margin banking customers by 2028—a reasonable target given its current 12% conversion rate—TBV growth could accelerate beyond current expectations.

Macroeconomic Risks: The Elephant in the Room

While SoFi's TBV growth is impressive, its exposure to macroeconomic cycles cannot be ignored. A recession could reduce loan demand, increase delinquencies, and pressure net interest margins. Additionally, regulatory scrutiny—particularly around consumer lending and fintech operations—remains a risk.

Interest rates also play a dual role: While rising rates may slow refinancing, they could boost SoFi's net interest income if managed prudently. The company's ability to navigate this balance will determine its resilience.

Valuation: 50% by 2028? A Cautious Optimism

To achieve a 50% stock price increase by 2028, SoFi must grow its TBV per share to roughly $7.00–$7.50, assuming a P/TB ratio contraction to 2.5–3.0 (closer to industry norms). This would require annual TBV growth of ~10–12%, achievable if cross-selling and fee-based revenue accelerate.

However, the current valuation already factors in optimism. A more realistic scenario might see the stock appreciate 30–40% by 2028, with upside if SoFi diversifies into higher-margin services or acquires complementary fintech assets.

Investment Thesis: Buy the Dip, Mind the Macro

SoFi is a compelling long-term play on the shift to digital financial services, but investors should proceed with caution. The stock's current premium valuation demands patience, as macro risks could weigh on short-term performance.

Recommendation:
- Hold: For investors with a 3–5-year horizon, SoFi's TBV growth and cross-selling potential justify a position.
- Avoid: Near-term traders should wait for a pullback, ideally with a P/TB ratio below 3.0, before accumulating.

While a 50% rise by 2028 is possible, it hinges on SoFi executing flawlessly in an increasingly crowded market. For now, the path to growth is clear—but the road is far from smooth.