The Theoretical Stock Price of SoFi is $38: A Complete Reproduction of Anthony Noto's Logic

* This article is written based on the stock valuation logic of SoFi CEO Anthony Noto, as presented in the YouTube video "EXCLUSIVE: Anthony Noto Reveals SoFi’s 2026 Roadmap".

"What is the fair stock price?" When faced with this question, many investors make judgments based on P/E ratios or recent financial performance.

However, Noto consistently maintains the position that:
• stock prices should be evaluated based on future earnings growth,
• and for that purpose, the "PEG ratio" should be used.

In this article, we will organize
• "PEG ratio" and "discounted present value" from two perspectives to explain
• why SoFi stock is currently considered undervalued.

* During his time at Goldman Sachs, Anthony Noto was a top-tier analyst who evaluated high-growth companies, including Amazon. Therefore, this PEG-based valuation method is not an afterthought, but a practical framework that Noto actually used.

<What is the PEG ratio?>
It is an indicator used to evaluate whether a stock price is undervalued relative to its earnings growth,
• calculated as "PEG ratio = P/E ratio ÷ EPS growth rate".

The general guideline is often considered to be "less than 1.0x: undervalued, around 1.0x: neutral, 1.5x or higher: overvalued".

* Even with the same P/E ratio of 20x, the meaning of overvalued or undervalued differs between a company with 10% annual earnings growth and one with 40%. Naturally, a company with significant earnings growth justifies a higher P/E ratio.

<Noto's Stock Valuation Logic>
Noto's stock valuation process is extremely clear and consists of the following four steps.

1. Set SoFi's earnings growth rate as a premise
2. Back-calculate the fair P/E ratio from the PEG ratio
3. Calculate the future stock price
4. Discount it to present value

SoFi has provided medium-term guidance that the average annual EPS growth rate through 2028 will be 38–42%. For this earnings growth rate of 40% (median), Noto uses 1.1x as the PEG ratio level for financial services companies.

Then, the fair P/E ratio becomes "1.1 × 40% = 44x".

The point is that the P/E ratio is not set arbitrarily, but is "back-calculated from the growth rate." Then, by multiplying this 44x P/E ratio by the future EPS, the future theoretical stock price is derived.

* Back-calculating the P/E ratio from the growth rate means:
• Converting the formula from "PEG ratio = P/E ratio ÷ EPS growth rate" to
• "PEG ratio × EPS growth rate = P/E ratio."
• Then, adopting the 1.1 PEG ratio for financial services companies,
• and multiplying by the 40% EPS growth rate,
• calculating "1.1 × 40% = 44x P/E ratio."

Furthermore, since the current PEG for the overall market is considered to be around 1.4–1.5x, there is theoretically room for SoFi's P/E ratio to be as high as around 60x (1.5 × 40%).

<Stock prices are evaluated by 'discounted present value'>
However, "future stock price" does not equal "current stock price." This is because time and risk exist.

This is where "discounted present value" comes in. The concept is simple:
• Future value must be converted to "present value" at a certain discount rate, and
• Noto uses a discount rate of 12% for his calculations.

For example:
• If the theoretical stock price in 3 years is $50 and the discount rate is 12%,
• Using the formula: Present Value = Future Value ÷ (1 + discount rate)^number of years,
• Present Value = 50 ÷ (1.12³) ≈ $35.6.

* A discount rate of 12% is not a fixed value. While the long-term return of US stocks is considered to be about 8–10%, considering the uncertainty inherent in growth companies, about 10–14% is a reasonable benchmark. Within that range, 12% can be considered a balanced discount rate that is neither optimistic nor pessimistic.

<This logic is also reflected in actual contracts>
Noto has stated that the financing scheme he entered into in August 2025 was designed based on this valuation logic.

In this contract,
• Maturity: August 28, 2028
• Cap price: $49.18
are the conditions set.

In other words,
• Applying a PEG ratio of 1.1 to future EPS, and
• keeping a P/E ratio of 44x in mind from there,
• it can be consistently explained that the $49 level was set as the stock price for the end of August 2028.

*From this, it is believed that Noto sees the 2028 EPS at around 1.12 ($49.18 ÷ 44x P/E). This is roughly consistent with the range if it grows at around 40% annually until 2028, as per company guidance, from the 2025 EPS of $0.39. (0.39 × 1.4 × 1.4 × 1.4 ≒ 1.07)

<What the current stock price means>
This is where it gets important.

By discounting this stock price for the end of August 2028, which Noto assumes, back to its present value at a 12% discount rate, we can determine whether the current stock price is undervalued.

Discounting $49.18 at the end of August 2028 by 12% annually for approximately 2 years and 4 months until the end of April 2026:
• 49.18 ÷ (1.12^2.333) ≒ $37.8. *1.12^2.333 ≒ 1.30

Based on this premise, the current stock price is being left at a low level of about 40% of the theoretical value, suggesting significant upside potential.
*The theoretical stock price here is a calculation based on the premises of '40% EPS growth rate,' '1.1x PEG,' and '12% discount rate,' and the calculated value will fluctuate if the premises change.

Given the premises so far, the meaning of the current stock price becomes clear.

The current PEG ratio is 0.68, which is considered to be at a fairly undervalued level.
• Based on the closing stock price of $16.22 on April 10, 2026, and
• the 2026 expected EPS of $0.6,
• the expected P/E ratio is 27.0x ($16.22 ÷ $0.6).
• Assuming a 40% EPS growth rate,
• PEG ratio = 27.0 ÷ 40 = 0.68
*Since I expect the above EPS to be revised upward, there is a possibility it is even more undervalued.
*Because my own EPS forecast is 0.7, the PEG ratio is 0.58 based on the same calculation.

If the market is evaluating it with such a low PEG ratio, it means either
• the market does not see it growing according to company guidance
• or it is being left undervalued by the market.

However,
• if 40% profit growth is realized, and
• we stand on the premise that the PEG is evaluated at around 1.1,
• a P/E of 44x is justified, and the stock price will eventually rise.

<Summary>
What is important when considering the stock price is future growth and how it is evaluated.

The logic Noto presents is consistent.
・Linking growth and P/E ratio using the PEG ratio
・Deriving stock price from future earnings
・Discounting that to present value

And this way of thinking is also reflected in his own financing agreements,
・"What he says" and "actual actions" are consistent.

Also, SoFi's current stock price is highly likely to be quite undervalued if we assume 40% growth.

This is not mere optimism, but a rational valuation based on the logic of the "PEG ratio" and "discounted present value."

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