Looking for Fintech Growth? Here's How Affirm and SoFi Stack Up
Affirm Holdings, Inc. AFRM and SoFi Technologies, Inc. SOFI are two standout names in the fast-evolving fintech sector. Both cater to Gen Z and millennial consumers, as well as older consumers, through technology-driven financial solutions that blend lending, digital banking and personal finance. While Affirm primarily focuses on point-of-sale financing through its buy now, pay later ('BNPL') model, SoFi operates a broader platform, encompassing lending, investing, banking and tech infrastructure.
With digital financial services becoming more competitive and investors seeking scalable profitability, it is the perfect time to examine these two disruptive players side by side. Let us take a closer look at their fundamentals, execution strategies, and market positioning to see which one currently holds stronger growth potential.
The Case for Affirm
Affirm is witnessing rapid growth. In its third-quarter fiscal 2025 results, the company posted $783.1 million in revenues, up 36% year over year, and recorded an adjusted EPS of a penny, beating the Zacks Consensus Estimate by a wide margin. Affirm had long operated at a loss, but since the second quarter of fiscal 2025, it has demonstrated that scale and disciplined growth can translate into bottom-line results. Management also raised full-year guidance; revenues are now anticipated to be in the range of $3.163-$3.193 billion, higher than the prior outlook of $3.13-$3.19 billion.
Affirm's success is rooted in its expanding merchant partnerships, ranging from Shopify and Apple Pay to Amazon and FIS, and its growing international presence, including Canada, the U.K. and Western Europe. The company's technology platform, which seamlessly integrates into e-commerce checkouts, is helping Affirm capture greater market share in the increasingly competitive BNPL space. Its adjusted operating margin for fiscal 2025 is expected to be 23-23.6%.
Affirm's focus on unit economics, expanding partnerships, and disciplined cost structure makes it an increasingly attractive fintech growth story. The company is delivering on what investors want to see in 2025: profitable growth.
Affirm is increasingly leveraging AI to boost employee productivity, including the use of a large language model-powered chatbot that manages a high volume of daily customer interactions with speed and accuracy. The company also plans to launch advanced tools aimed at helping merchants optimize customer acquisition, creating value on both sides of the transaction.
With a strong track record in risk management, Affirm continues to expand its long-term funding relationships to support rising loan originations. It has already completed 24 asset-backed securitizations totaling $12.25 billion, backed by more than 150 diverse capital partners, underscoring the depth and resilience of its funding network.
The Case for SoFi
SoFi Technologies, too, has had an impressive run. In first-quarter 2025, it delivered record revenue of $770.7 million, growing 33% from a year ago, with net income jumping more than 200% to $71.5 million. Membership growth remains strong, with the platform adding more than 800,000 new users in the quarter, bringing the total to a whopping 10.9 million. SoFi's multi-pronged model, which spans banking, lending, investing, and even fintech infrastructure (through Galileo), has created a diversified business capable of capturing value across multiple verticals.
In addition, SoFi's adjusted EBITDA rose to $210.3 million in the first quarter, reflecting a healthy 27% margin, and the company raised guidance for the full year. Its expanding suite of products and cross-selling ability positions SoFi as a well-rounded player in the digital finance space. However, the company's broad scope also introduces greater complexity. Executing across so many business lines simultaneously requires exceptional coordination.
SoFi's heavy reliance on unsecured personal loans, which make up nearly 70% of its lending portfolio, raises concerns about the sustainability of its growth in the face of potential economic stress. This concentration exposes the company to elevated credit risk, especially given that the borrower-level delinquency rate for unsecured personal loans was 3.49% in the first quarter of 2025, per reports.
SoFi's liquidity appears strained, with $27.9 billion in current liabilities, just $2.7 billion in cash as of March 31, 2025, and a current ratio of 0.8, which is below the industry average. This suggests limited flexibility to meet near-term obligations. In contrast, Affirm's robust current ratio of 11.5 highlights significantly stronger short-term financial health.
How Do Zacks Estimates Compare for AFRM & SOFI?
Zacks estimates show Affirm on a sharp upward trajectory. The Zacks Consensus Estimate for AFRM's fiscal 2025 sales and EPS implies a year-over-year improvement of 37% and 101.8%, respectively. The EPS estimates have been trending northward over the past 60 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Image Source: Zacks Investment Research
In contrast, SoFi is also expected to grow earnings, but the momentum is with AFRM. The consensus estimate for SoFi's 2025 sales and EPS implies a year-over-year rise of 26.2% and 80%, respectively. The EPS estimates have been trending northward over the past 60 days.
Image Source: Zacks Investment Research
Price Performance Comparison
Over the year-to-date period, AFRM shares gained 9.8% while SOFI witnessed an 8.9% growth. During this time, the S&P 500 Index grew 2.9%. Affirm also shows stronger short-term momentum, with a 1-month gain of 32% compared to SoFi's 25.9%. Overall, Affirm's superior performance so far this year, driven by better earnings visibility and market sentiment, gives it a modest edge over SoFi.
Price Performance – AFRM, SOFI & S&P 500
Valuation: AFRM vs. SOFI
AFRM is currently trading at 5.49X forward 12-month P/S, higher than SOFI's 5.15X. Although SoFi appears cheaper, it is important to consider context: Affirm is rapidly scaling and has entered profitability, giving investors confidence in its underlying economics and growth potential. SoFi, by comparison, has a broader but more complex business model, one that the market is valuing relatively conservatively, perhaps reflecting its operational diversification and execution risks.
Last Words
Both Affirm and SoFi are standout fintech innovators with strong growth narratives, but Affirm currently has more room to run. It is 18.9% below its 52-week high of $82.53, while SOFI is 9% away from its 52-week high of $18.42. AFRM has demonstrated a decisive pivot to profitability, posted robust revenue growth, and continues to expand its merchant ecosystem with disciplined execution. Its AI integration, risk-managed lending and deep capital partner network support its long-term scalability. In contrast, SoFi's broad platform comes with greater complexity and credit concentration risk, especially in unsecured personal loans. Liquidity pressures and a lower current ratio add further caution.
With stronger earnings momentum, better short-term liquidity, and a focused business model gaining traction, Affirm stands out as the fintech stock with more attractive upside potential, even though the companies currently carry a Zacks Rank #3 (Hold) each.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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