SoFi Technologies (NASDAQ:SOFI) stock has dropped nearly 20% since mid-August, but many remain bullish.

In the near term, the bulls believe this fintech firm will see a boost to its results within a few quarters, once the student loan moratorium is lifted. In the long term, they believe shares will keep climbing, as SoFi’s growing membership base translates into further high revenue growth.

However, as I’ve argued in recent coverage of SoFi, I see it far differently. It’s debatable whether last month’s news on student loans really changes the story. Even if it is an overall positive for the company, today’s valuation likely takes this into account. Perhaps, overly so.

I’m not alone in holding this view. A recent analyst rating, although neutral rather than bearish, expresses similar sentiments. Let’s dive in, and see why this still isn’t a worthwhile opportunity.

SOFI Stock and the Flawed Bull Case

Bullish investors may believe it’s all uphill from here once the student loan repayments resume in January. Not only because the resumption of repayments could spark demand for private refinancing of federal loans with third parties like SoFi.

They also believe the company will have the opportunity to cross-sell its other financial services offerings to these customers. In turn, resulting in continued high growth, which will justify a move for SOFI stock to substantially higher prices. On the surface, it might sound like a solid bull case, but there’s a major flaw.

SoFi’s valuation already took into account the end of the moratorium. While it was extended several times, it was inevitable that this pandemic-era forbearance would come to an end.  The sell-side was already factoring it into its forecast of around 40% revenue growth in 2023.

Upside Limited by Expected Future Earnings

The needle-moving potential of its student loan catalyst isn’t the only thing I’ve questioned about SOFI stock. Early last month, I questioned whether a partial or full recovery for this hard-hit stock was possible, given this fintech’s long timeline to consistent profitability.

Forecasts call for SoFi Technologies to stay unprofitable until at least 2024. Continued losses could limit the stock’s ability to move further in the near term. Even in the long-run, future earnings (estimated to be around 40 cents a share in 2025) may not be enough to send the stock to prices materially above what it trades for today.

Given that fintechs like PayPal (NASDAQ:PYPL) trade for 20x-25x earnings, you may at first be perplexed why 40 cents per share in earnings won’t result in a big move higher for SoFi. However, while both SoFi and PayPal are fintech stocks, comparing them to each other isn’t apples-to-apples.

More akin to a bank than payments-focused PayPal, it may prove difficult for this particular stock to maintain a similarly-high valuation once it matures. Instead, it may end up trading at a multiple closer to that of traditional bank stocks. At best, this may mean a 15x multiple, which values it at around its current trading price.

Bottom Line on SOFI Stock

As InvestorPlace’s Eddie Pan reported Sept. 16, analyst Bill Ryan from Seaport Global Securities has issued a “neutral” rating on the stock.

Similar to my view, the analyst believes future growth is overly priced-in. Ryan says the stock should be worth only $5 per share, based on expected future results (specifically, 2024 results). Also like me, Ryan believes earnings will play a large role in driving where the stock goes from here.

There are buying opportunities out there among the growth stocks hit hard during the 2022 downturn. SOFI stock isn’t one of them, though. It could stay stuck for several years as it grows into its valuation. Continue to hold off on it, as there’s limited upside potential.

SOFI stock earns a D rating in my Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.