SoFi Technologies is facing a puzzling disconnect: its stock price has dropped 37% this year, trading near $16.46, despite the company showing strong growth in key metrics. The upcoming Q2 2026 earnings report on July 29 will shed light on whether this gap between market sentiment and operational performance will narrow.

Strong Growth, But Stock Lags

In Q1 2026, SoFi reported a 68% year-over-year surge in loan originations, hitting $12.18 billion a new record for the company. Net income more than doubled, climbing 134% to $166.73 million, while operating income jumped over 150%. Membership expanded 35%, with nearly half of new product sales coming from existing customers, indicating effective cross-selling.

Despite these encouraging figures, SoFi’s shares remain about half their peak from earlier this year. The company forecasts adjusted net revenue reaching $4.655 billion for the full year, a 30% increase, along with $0.60 in adjusted EPS. Their medium-term outlook includes a 38% to 42% annual growth rate in adjusted EPS through 2028.

Valuation and Peer Comparison

At a forward price-to-earnings ratio of 28 and a PEG ratio under 1, SoFi appears undervalued given its growth prospects. For context, LendingClub trades at a lower P/E of 12 but grows revenue only at 12.5% per year, while Upstart’s valuation is higher with less profitability and no bank charter or deposit base.

Profit margins are another strength for SoFi: its 14.8% profit margin and 18.3% operating margin outpace these competitors. Wall Street’s average price target around $21 suggests a potential 29% gain from current levels, supported by SoFi beating estimates for seven straight quarters.

Analysts and Market Sentiment Ahead of Earnings

However, analysts remain cautious. Truist’s Matthew Coad keeps a Hold rating with an $18 price target, citing concerns about pressure on interest margins, increasing costs to attract customers in a competitive neobank field, and possible slowing growth in the Loan Platform Business because of tough comparisons.

Coad also notes the company’s full-year guidance depends on a strong finish to 2026, meaning any revenue miss or spending increase could jeopardize the $0.60 EPS target. Meanwhile, options traders are pricing in a post-earnings move exceeding 10%, above the stock’s typical post-earnings volatility.