Excitement over recent insider buying has cooled down, but there’s something else that may have some investors interested in SoFi Technologies (NASDAQ:SOFI) stock.

SOFI has been affected by many factors, but the continued “student loan saga” has played a major role in the fintech stock’s slump over the past six months.

This “saga” will come to a close later this year. In turn, clearing up a key issue for the company.

Bullish investors may believe now, ahead of this event, is the time to begin building a position. However, one can argue that a clearing up of this challenge is already baked into SOFI’s valuation.

As I’ve argued in past coverage, this stock’s potential long-term runway is much more limited than it may appear on the surface. Add it all up, and it’s still hard to see this being a great “bottom-fisher’s buy” at current prices.

SOFI Stock and Its 2023 Catalyst

SoFi Technologies’ student loan catalyst has evolved greatly since last summer. Last August the Biden Administration first announced plans to partially forgive federal student loan debt and end the repayment pause.

Investors anticipated a big 2023 comeback for the company’s student loan refinancing business, and, as a result, reaccelerating user and revenue growth.

However, critics challenged the plan, resulting in an upcoming Supreme Court case. This has been a big setback for the SOFI stock student loan catalyst. The court case has resulted in a further extension of the pause. Repayments will not resume until later in the year.

This has extended the timeline for a possible surge in growth for the company but hasn’t fully taken it off the table. Hence, investors today may be looking to buy today, ahead of renewed enthusiasm down the road. Unfortunately, a massive rebound for SOFI may not be in the cards.

Even as the stock has fallen to penny stock levels, shares remain pricey compared to future growth projections.

These projections already take into account an end to the student loan pause, and the resultant boom to SoFi’s legacy business, as well as to its efforts to cross-sell financial services.

Multiyear Upside Is Limited

As an early-stage company, it makes sense that the market values SOFI stock more on future potential than on present results. However, based on long-term forecasts, investors today get a scant discount for tomorrow’s “potential.”

Based on said forecasts, SoFi Technologies may become profitable by 2024. By 2025, earnings could hit 35 cents per share.

Not too shabby, against a $4.50 per share stock price, or is it? Only time will tell whether the market ultimately decides to value this company like other fintech firms.

Investors could ultimately value it more like a bank (at 10-15 times earnings). Even if the market gives SoFi Technologies a valuation above that of a bank stock, don’t assume that means an eventual trip back to the loftier price levels last hit during the 2021 bull market.

Interest rates are rising back up, and are unlikely to fall back toward near-zero levels. Growth stock valuations aren’t likely to re-hit pandemic-era levels.

At best SoFi may be only able to command an earnings multiple of between 20 and 25 once it becomes established. In other words, a move back to $8.75 per share within two years.

The Bottom Line

Sure, a possible near-doubling in price within a few years doesn’t sound like limited upside. Keep in mind, though, that it’s hardly a given SoFi makes this big recovery. Future projections may be overestimating the extent this digital-first financial institution “disrupts” traditional banks and brokerage houses, and grabs significant market shares.

Considering its current cash burn, this fintech may have to raise more capital (on dilutive terms) in the future as well. All of this needs to become more greatly factored in SoFi’s current valuation.

In the nearer term, the resumption of student loan repayments may at the most give this stock a short-lived boost, similar to what played out following events such as the initial student loan relief news. A big, sustained recovery isn’t likely in the cards.

Until the story with SOFI stock really changes, continue to steer clear.

SOFI stock earns a D rating in 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.