The financial services industry is incredibly crowded. This makes it one of the most competitive sectors in our economy, and provides consumers with many choices.
To its credit, SoFi Technologies(NASDAQ: SOFI) has successfully carved out a niche in the past decade by leaning heavily on technology and digital capabilities to target a younger customer cohort. The company continues to expand at a brisk pace.
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Shares haven't done much to please investors. As of April 11, they were down 30% in 2025. If we look to the future, though, does this fintech stock have millionaire-maker potential?
Impressive growth
CEO Anthony Noto wants SoFi to become a top-10 financial institution. Whether it's revenue, assets, or market cap, it's not exactly clear what metric he wants to measure this by. But that's certainly an ambitious goal that should draw excitement from investors about where his head is at -- he's thinking big.
Its growth trajectory can certainly give investors confidence. The customer base has expanded tenfold in the last five years to 10.1 million. This has resulted in rapid revenue gains as well, driven by a wide range of offerings that make SoFi a comprehensive financial services provider.
A sizable opportunity remains to cross-sell customers on new products over time, which can lead to higher switching costs for them and a more lucrative relationship for SoFi.
The fintech is leaning heavily on its brand strength among consumers to find innovative ways to make more money. In March, it entered a $5 billion Loan Platform Business agreement with Blue Owl Capital Funds for personal loans. SoFi refers borrowers to the partner and helps to originate loans, creating a capital-light and fee-based business line in the process.
SoFi's profit potential
Last year was a milestone for SoFi, as it registered its first full year of positive net income, which totaled $499 million under generally accepted accounting principles. The leadership team expects big progress in the coming years.
JPMorgan Chase is widely viewed as the highest-quality bank. Last year, it reported a net profit margin of 32.9% (compared to 18.7% for SoFi). I'm not saying the fintech will get there, and there are differences in their business models, but this shows you the earnings upside.
The economy adds a wrinkle investors need to think about. If the U.S. enters a recession in the near term, a bank like SoFi will be hurt.
There could be less demand for loans, and existing borrowers might miss their payments. In this downbeat scenario, losses would rise, derailing the progress that has been made thus far in boosting the bottom line.
However, investors might want to give the company the benefit of the doubt. It has handled various interest-rate environments up to this point. While a recession might cause pain, it will likely be short-lived.
Millionaire dreams
Like all companies these days, Sofi can face potential headwinds due to uncertainties regarding the broader economic backdrop. That doesn't mean it's a bad investment opportunity, though.
It's quite the opposite. SoFi's disruptive and innovative financial services platform, strengthening brand presence, customer growth, and earnings prospects are favorable traits investors should keep in mind. Not to mention, the valuation isn't extreme, with shares trading at a price-to-sales ratio of 4.5.
Deciding whether this fintech stock should be in your portfolio is one thing. Hoping that owning it can one day make you a millionaire is an entirely different discussion. A decade or two from now, it could be a significantly larger business, which can lead to tremendous returns for shareholders.
But investors shouldn't bank on one company helping them generate vast wealth. Don't forget that successful investing means creating a diversified portfolio, with SoFi Technologies possibly being one piece of the puzzle.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
