The U.S. and Iran have agreed to a peace deal that is expected to be signed later this week. While it would be prudent to keep fingers crossed given the long history of conflicts in the region and the mutual suspicion between the two warring sides, for now, markets are taking a sigh of relief. Beyond the human cost of the war, the conflict choked global supply lines, particularly oil and gas passing through the Strait of Hormuz, pushing energy prices higher.
Rising energy prices, in turn, pushed up inflation. Stateside, May consumer price index (CPI) rose at an annualized pace of 4.2%, the highest in three years. Meanwhile, oil prices have fallen significantly from their 2026 highs, even though they remain higher than levels we saw at the beginning of the year.
There is a relief rally in global markets today, June 15, as expected. Meanwhile, it may be a good idea to bet on a beaten-down name like SoFi (SOFI) now. The stock soared 70% last year but is in the red this year, underperforming the markets by a wide margin. While SoFi still faces some company-specific headwinds, an improvement in the macro environment should help buoy sentiment. Let’s analyze why SoFi could be a bargain here after the frustrating underperformance so far this year.
Why Has SoFi Stock Dropped in 2026?
To begin with, let’s look at some of the factors that dragged down SoFi stock this year. On a macro level, higher inflation has not only virtually ended the possibility of a rate cut this year but instead raised the odds of a hike. Higher interest rates are negative for SoFi’s lending business. There are also fears of slippages in its lending business given the macro slowdown.
Moreover, SoFi’s sell-off coincided with the crash in cryptocurrencies. The company relaunched its crypto trading business late last year, and the timing couldn’t have been worse. Missing out on the anticipated S&P 500 Index ($SPX) inclusion also dampened sentiments.
On a more company-specific level, SoFi’s Technology Platform lost a major client last year, which has taken a toll on that segment’s performance. The company’s $1.5 billion capital raise has also been an overhang, even though I believe raising cash when the stock price is visibly bloated is a wise strategy, just as repurchases make sense at depressed valuations.
Should You Buy SoFi Stock?
While some of the concerns are quite genuine, I believe so much pessimism towards SoFi is unwarranted. SoFi’s growth engine is far from over, and it added over a million new members in the previous two quarters and expects at least 30% annual growth in its member count this year. These members are the growth funnel for SoFi, and the company can then cross-sell them more products from its arsenal of ever-rising products.
Cross-selling has incidentally been key to SoFi’s success, and the cross-sell rate increased to 43% in Q1 2026 as compared to 40% in the previous quarter. Its SoFi Plus subscription is helping build a recurring income stream while fueling cross-buying, with the management pointing out that half of the people signing up for the subscription also buy another product on its platform.
The loan platform business (LPB), where SoFi originates loans for third parties, is another key driver of growth. According to the company, it is unable to lend to loan applications worth $100 billion annually. These are customers who do not meet SoFi’s credit standards. But by originating loans for other lenders, SoFi gets low-risk, high-margin revenues. In Q1, SoFi originated $5.4 billion in personal loans on its balance sheet and around $3 billion on the LPB, with the latter rising 90% year-over-year (YOY).
Losing a big Tech platform client, namely Chime, has been a short-term headwind for SoFi, but the company is enhancing its tech capabilities through acquisitions, and last month it acquired Peach, a lending tech platform, and the majority of the stake in PrimaryBid, a U.K. fintech company.
From a valuation perspective, the stock trades at a forward price-to-earnings (P/E) multiple of 28.56 times. While a section of the market has been fixated on the price-to-book value multiple, which would appear elevated at around 2x, I believe the book value multiple is not as important for SoFi as a traditional bank, given its business model, which is a mix of a traditional bank, given its bank charter, as well as a fast-growing fintech company.
Overall, I find the stock an attractive buy here, particularly following the Iran deal, which should help address some of the macro challenges that SoFi has been battling.
