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Is SoFi a millionaire maker?

Since its founding in 2011 SoFi Technologies (NASDAQ:SOFI) has quickly developed into an emerging financial services provider. The technology-enabled banking platform continues to grow at a healthy pace and is poised for a financial turnaround. But the shares remain well away from their record high.

Can do that Fintech stock Become a millionaire? Here's what investors with these expectations need to know about SoFi's prospects.

SoFi is a financial services provider but does not own or operate physical bank branches. Instead, various offerings such as bank accounts, loans, credit cards and insurance products are offered through the company's mobile app. SoFi has positioned itself to thrive in a highly competitive banking industry. The focus is on leveraging the popularity of smartphones and the internet to deliver a premium user experience in a market not known for it.

The growth was excellent. SoFi generated revenue of $599 million in the second quarter (ended June 30), up 421% from four years ago. And its current customer base of nearly 8.8 million is more than seven times larger than the same period in 2020. The business is clearly resonating with consumers, particularly younger and wealthier ones.

Given the massive size of the banking sector, it's not hard to believe that SoFi still has plenty of room to grow. “Our member and product growth will drive our financial growth in the coming years,” CEO Anthony Noto said on the second quarter 2024 earnings call.

Wall Street Analyst consensus estimates suggest revenue will grow at a compound annual rate of 17.8% between 2023 and 2026. While this would mark a slowdown from the gains seen in previous years, it is undoubtedly still a robust outlook that potential investors should be excited about.

Typically, fast-growing, technology-focused companies experience persistent net losses. The market is sometimes okay with this because these companies promise big profits in the future. Fortunately, SoFi is already profitable. Positive earnings were reported based on GAAP Net profit for three consecutive quarters.

Management expects a dramatic improvement. They expect SoFi to generate earnings per share (EPS) of $0.68 (at the midpoint) in 2026. That would be significantly more than the $0.09 to $0.10 forecast for this year. And after 2026, earnings per share are forecast to grow 20% to 25% on an annual basis.

Of course, any management team can and will release numbers to please their shareholders. However, there are reasons to believe that the bottom line outlook is realistic.