Upstart Holdings UPST and SoFi Technologies SOFI are the two well-known names in the fintech industry. However, the two companies have radically different business models and market strategies. With investor enthusiasm fluctuating wildly in response to shifts in interest rates and economic uncertainty, the question remains: Which stock offers the smarter bet today?
Upstart Holdings: A High-Risk, High-Reward Disruptor
Upstart Holdings has built its brand around using artificial intelligence (AI) and machine learning to assess creditworthiness, moving beyond outdated FICO scores to incorporate a range of variables like education and employment history. This data-driven model is helping the company automate the loan process.
In the fourth quarter of 2024, a whopping 91% of Upstart Holdings’ loans were fully automated. That kind of massive loan automation not only lowers costs but also enables faster approvals and more competitive rates, which provides a critical advantage in the personal lending market.
The bullish case for Upstart Holdings doesn't end with personal loans. The company is pushing into auto lending, home equity lines of credit (HELOC) and small-dollar relief loans — all showing robust growth. In the last reported quarter, auto originations jumped 60%, HELOCs grew 60%, and small-dollar loans surged 115% quarter over quarter. This strong growth was driven by improved models, rising conversion rates and enhanced automation tools like instant income verification.
Regarding Upstart Holding’s financial strength, its latest results for the fourth quarter of 2024 showcased remarkable growth, with revenues rising 56% year over year. The company’s bottom line flipped to a non-GAAP profit of 29 cents per share from a loss of 11 cents in the year-ago quarter. Its revenue growth guidance of 57% for the first quarter and 59% for full-year 2025 indicates continued growth momentum in the near term.
SoFi Technologies: A Diversified Fintech
SoFi Technologies has evolved into a broad-based digital financial platform offering banking, investing, lending and personal finance tools. Also, the company holds a national bank charter, which allows it to fund loans through its balance sheet. This low-cost funding advantage has helped SoFi Technologies weather the interest rate storm more effectively.
One of SoFi Technologies’ standout features is its ability to cross-sell services, driving higher member growth. In the fourth quarter of 2024, the company added 785,000 new members, the most in its history, while continuing to increase product-per-user metrics through cross-selling. The company has been rolling out new features, including SoFi Plus, crypto infrastructure upgrades and alternative investment tools — all aimed at deepening customer engagement.
Additionally, SoFi Technologies may strengthen its cryptocurrency exposure by adding costing and clearing services, asset-backed lending and other crypto-related financial products. This strategic move is particularly relevant in the current regulatory climate, as President Trump has expressed ambitions to position the United States as the world’s crypto capital.
Despite these initiatives, SoFi Technologies’ growth trajectory has remained well below that of Upstart Holdings. SOFI’s revenues and non-GAAP EPS grew 19% and 150%, respectively, year over year in the fourth quarter. While growth rates were impressive, they were relatively much slower than Upstart Holdings. It expects just 24% revenue growth for full-year 2025, a far cry from Upstart’s 59% top-line growth forecast.
Stock Price Performance and Valuation of UPST and SOFI
Despite broader market headwinds, Upstart Holdings shares have returned 46.9% over the past 12 months, outperforming SoFi Technologies’ more modest 25.7% gain.
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From a valuation standpoint, both stocks trade at similar forward 12-month price-to-sales (P/S) multiples of around 3X. However, Upstart Holdings’ P/S ratio of 3.08 sits well below its one-year median of 5.26, suggesting more upside potential. SoFi Technologies’ 3.03X multiple, by contrast, is right in line with its historical average, which implies that much of its expected growth may already be priced in.
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How Do Zacks Estimates Compare for UPST & SOFI?
The Zacks Consensus Estimate for Upstart Holdings’ 2025 sales and EPS implies a year-over-year increase of 59.3% and 785%, respectively. EPS estimates for 2025 have been trending northward over the past 60 days.
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The Zacks Consensus Estimate for SoFi Technologies’ 2025 sales and EPS implies year-over-year growth of 23.9% and 66.7%, respectively. However, EPS estimates have been trending southward over the past seven days.
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Conclusion: Buy UPST, Hold SOFI
Both Upstart Holdings and SoFi Technologies possess unique strengths. However, UPST’s AI-driven models and diversification strategies position it for higher growth than SOFI. Additionally, Upstart Holdings’ attractive valuation and favorable estimate revisions make it a better investment choice in the current market environment.
While UPST has a Zacks Rank #2 (Buy) at present, SOFI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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