2 Fintech Stocks to Buy After Losing Over Half Their Value

What happened to SoFi?

SoFi operates an online \u201cone-stop shop\u201d for loans, credit cards, insurance policies, estate planning services, stock trading tools, crypto trading tools, and other financial services. It acquired the digital payment processing company Galileo in 2020, and launched its own digital bank after obtaining a U.S. bank charter in 2022. Its digital-only approach made it popular among younger customers, enabling it to expand much faster than brick-and-mortar banks.

SoFi ended the second quarter of 2026 with 15.8 million members, representing 35% growth from a year earlier. Its products in use jumped 42% year over year to 24.4 million.

For the full year, SoFi expects its adjusted net revenue to rise 32%-35% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expands from 29% to 33%-34%. Analysts expect its revenue and adjusted EBITDA to rise 36% and 54%, respectively. With an enterprise value of $17.2 billion, it trades at 11 times this year's adjusted EBITDA.

SoFi looks cheap relative to its growth for two reasons. First, it's often lumped together with conventional banks, which usually trade at lower multiples, instead of higher-growth fintech companies. Second, inflation and other macro headwinds could trigger more credit defaults. That's why its stock plummeted more than 50% after hitting its all-time high last November.

However, rising interest rates should actually boost SoFi's net interest income, which accounts for most of its revenue and gross profit. It's also collecting more fee-based revenues to reduce its long-term exposure to interest rate swings. So as long as SoFi doesn't get hit by a wave of non-performing loans, its stock should bounce back as its valuations warm up again.

What happened to Circle?

Circle mints USD Coin, the most widely used stablecoin in the United States. It backs the USD Coin with its own cash and Treasury reserves on a 1:1 basis. It generates most of its revenue and profits by collecting interest (reserve income) on those assets.

The more USD Coins it mints, the more cash and Treasuries it must accumulate to back its own tokens. As its reserves grow, its reserve income will rise -- so higher interest rates should actually be a net positive for Circle's profit growth. However, two major challenges caused Circle's stock to sink about 70% after it reached its all-time high last June.

First, a coalition of more than 140 companies backed the development of a new stablecoin, OpenUSD (OUSD), in June. Unlike USD Coin, which was centralized under Circle, Open USD would be a decentralized token with democratized control across its ecosystem partners. That competition could steal USD Coin's thunder and reduce Circle's reserve income.

Second, the U.S. Senate failed to pass the CLARITY Act, which would have established a clear federal framework for regulating digital assets and stablecoin yields. Without those firm rules in place, fewer financial institutions would replace their fiat currencies with stablecoins. The murky legality of stablecoin yields earned on third-party platforms would also keep more yield-seeking investors locked into traditional bank accounts, CDs, or other fixed-income investments.

However, analysts still expect Circle's revenue and adjusted EBITDA to rise by 10% and 21%, respectively, this year, as more financial institutions integrate stablecoins into their rails. With an enterprise value of $19 billion, it looks reasonably valued at 27 times this year's adjusted EBITDA. If you expect Circle to overcome its near-term challenges, keep minting more USD Coins, and benefit from rising rates, then it's a great time to buy its beaten-down stock.