SoFi Technologies (SOFI): Momentum or Misstep? A Technical and Analyst Deep Dive

The financial technology sector has seen significant volatility in 2025, with companies like SoFi Technologies (SOFI) and OppFi (OPFI) vying for dominance. While SOFI has long been a leader in embedded finance, its recent performance raises questions: Is its current momentum sustainable, or is it overextending? This analysis evaluates SOFI's technical indicators, compares it with OPFI, and weighs analyst sentiment to determine whether investors should buy, hold, or avoid.

Technical Analysis: SOFI's Mixed Signals

SOFI's stock has been a rollercoaster ride this year. Despite 26.2% YoY revenue growth in Q1 2025, its stock price remains pressured. As of June 2025, SOFI trades at $13.09, with a YTD return of -14.35%, underperforming the industry's average of +3.26%.

Key Technical Metrics:
- RSI (14): 65.81 (neutral, neither overbought nor oversold).
- MACD: 0.52 (bullish crossover in late May but recent flattening signals potential overextension).
- Moving Averages: SOFI's price remains above its 20-day and 50-day EMA, suggesting short-term support, but the 100-day and 200-day EMA are lagging, indicating longer-term resistance.

Volume Concerns:
SOFI's trading volume spiked to 171 million shares on April 29, 2025, due to insider selling (e.g., Silver Lake Group offloading 31 million shares). While recent volumes have stabilized at 50–80 million shares daily, this volatility hints at institutional skepticism.

OPFI: The Underdog Outperforming

OppFi, a subprime lending specialist, has surged 57.97% YTD, outpacing SOFI and the sector. Its forward P/E of 10.99x offers a compelling valuation contrast to SOFI's premium 41.76x.

Technical Strengths:
- TA Score: 6 bullish vs. 4 bearish indicators,优于 SOFI's split signals.
- Risk-Adjusted Performance: OPFI's Sharpe Ratio of 3.68 dwarfs SOFI's 1.46, signaling superior reward-to-risk.
- Volume Stability: Despite higher volatility (19.21% vs. SOFI's 14.15%), OPFI's trading volume has remained consistent at 500,000–2 million shares daily, excluding event-driven spikes.

Analyst Sentiment: Hold SOFI, Buy OPFI

Analysts are divided on SOFI's future:
- Zacks Rank: #3 (Hold), citing its premium valuation despite strong earnings growth.
- Consensus Estimates: 2025 EPS of $0.27 (80% YoY growth) may not justify its P/E multiple.

For OPFI:
- Zacks Rank: #1 (Strong Buy), driven by its 285% YoY net income surge and risk management improvements.
- Earnings Catalysts: OPFI's Model 6 algorithm reduced charge-offs by 1,300 bps YoY, a key driver of profitability.

The Case for Caution with SOFI

While SOFI's Galileo acquisition and 90% gross margin in Q1 2025 are positives, technical and valuation red flags persist:
1. Overvaluation Risk: SOFI trades at 2x its 12-month median P/E, suggesting limited upside unless growth accelerates.
2. Institutional Sell-Off: Insider and hedge fund divestitures (e.g., Two Sigma's Q1 2025 sales) indicate waning confidence.
3. Slowing Momentum: SOFI's weekly performance dropped -5.96% in late May, contrasting OPFI's +1.44%.

Investment Recommendation

• Hold SOFI: For now. While its ecosystem expansion and embedded finance strategy have long-term potential, its current valuation and technical headwinds argue for patience. A dip below the $12.50 support level (200-day EMA) could present a buying opportunity.
• Buy OPFI: Its 10.99x P/E, superior risk metrics, and niche dominance make it a stronger short-term bet. Analysts project $1.23 EPS for 2025—well within reach given its operational efficiency.

Conclusion: Momentum vs. Value

SOFI's momentum is fading, while OPFI's value proposition is brightening. Investors should prioritize OPFI for capital appreciation in the near term, while monitoring SOFI for a correction. As always, diversification and risk management remain key—especially in a sector as volatile as fintech.

Final Verdict: OPFI is the better buy today. SOFI's time may come, but not at current prices.

Harriet Clarfelt
June 19, 2025