SoFi Technologies, Inc. (SOFI)vs JPM Holdings, Inc. (JPM)

Quick verdict

SoFi Technologies, Inc. (SOFI) and JPM Holdings, Inc. (JPM) appeal to different investors. On our six-factor framework, SOFI scores 1 and JPM scores 5. JPM looks cheaper on the multiples that matter, while JPM grows faster and JPM earns higher returns on capital. Overall, JPM edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

SoFi Technologies, Inc. operates in Credit Services (Financial Services), while JPM Holdings, Inc. sits in Drug Manufacturers (Healthcare). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. SOFI carries a beta of 1.54 versus 0.62 for JPM, meaning SOFI has historically been the more volatile of the two.

Valuation

On valuation, JPM is the cheaper stock. SOFI trades on a forward P/E of n/a and EV/EBITDA of 30.92, against 17.16 and 12.83 for JPM. Price-to-sales is 9.11 vs 16.08, and free-cash-flow yield is 4.0% vs 5.7%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

JPM is the faster grower. SOFI has compounded revenue at 9.9% over three years with EPS growth of 13.3%, while JPM has delivered 30.8% revenue and 18.8% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, JPM is stronger. SOFI posts a 1.5% operating margin, -14.2% return on equity and -2.7% return on invested capital. JPM posts 40.6%, 32.2% and 17.4% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

SOFI has the safer balance sheet. SOFI carries net-debt/EBITDA of -0.92x with a current ratio of 3.00, versus 2.62x and 1.89 for JPM. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year SOFI returned 86.9% against 116.8% for JPM; on a three-year annualised basis it is 23.5% vs 13.8%. SOFI yields 0.0% and JPM yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, JPM is the better fit on today's multiples. Growth investors will likely prefer JPM, which is expanding faster. Income investors should lean toward JPM for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour JPM for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: JPM
• Growth: JPM
• Income: JPM
• Quality: JPM

Frequently asked questions

Is SOFI or JPM the better buy right now?

Neither is universally "better." SOFI scores 1 and JPM scores 5 on our six-factor framework. JPM is cheaper, JPM grows faster, and JPM is higher quality — so the right pick depends on your objective.

Which stock is cheaper, SOFI or JPM?

JPM is the cheaper stock across forward P/E (n/a vs 17.16), EV/EBITDA (30.92 vs 12.83) and price-to-sales (9.11 vs 16.08).

Which has grown faster, SOFI or JPM?

JPM has the stronger growth profile, with three-year revenue CAGR of 9.9% for SOFI versus 30.8% for JPM.

Which stock pays a bigger dividend?

SOFI yields 0.0% and JPM yields 0.0%, so JPM is the stronger income choice.

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