Tesla, Inc. (TSLA)vs SoFi Technologies, Inc. (SOFI)

Quick verdict

Tesla, Inc. (TSLA) and SoFi Technologies, Inc. (SOFI) appeal to different investors. On our six-factor framework, TSLA scores 1 and SOFI scores 5. SOFI looks cheaper on the multiples that matter, while SOFI grows faster and SOFI earns higher returns on capital. Overall, SOFI 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

Tesla, Inc. operates in Auto - Manufacturers (Consumer Cyclical), while SoFi Technologies, Inc. sits in Financial - Credit Services (Financial Services). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. TSLA carries a beta of 1.80 versus 2.15 for SOFI, meaning SOFI has historically been the more volatile of the two.

Valuation

On valuation, SOFI is the cheaper stock. TSLA trades on a forward P/E of 26.25 and EV/EBITDA of 112.63, against n/a and 21.72 for SOFI. Price-to-sales is 11.37 vs 4.03, and free-cash-flow yield is 4.5% vs 4.0%. 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

SOFI is the faster grower. TSLA has compounded revenue at -2.9% over three years with EPS growth of -47.1%, while SOFI has delivered 28.8% revenue and -8.7% 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, SOFI is stronger. TSLA posts a 4.2% operating margin, 4.6% return on equity and 3.0% return on invested capital. SOFI posts 13.1%, 7.1% and 6.5% 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. TSLA carries net-debt/EBITDA of 1.01x with a current ratio of 1.94, versus -0.92x and 3.00 for SOFI. 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 TSLA returned 19.9% against 86.9% for SOFI; on a three-year annualised basis it is 47.7% vs 23.5%. TSLA yields 0.4% and SOFI 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, SOFI is the better fit on today's multiples. Growth investors will likely prefer SOFI, which is expanding faster. Income investors should lean toward TSLA for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour SOFI 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: SOFI
• Growth: SOFI
• Income: TSLA
• Quality: SOFI

Frequently asked questions

Is TSLA or SOFI the better buy right now?

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

Which stock is cheaper, TSLA or SOFI?

SOFI is the cheaper stock across forward P/E (26.25 vs n/a), EV/EBITDA (112.63 vs 21.72) and price-to-sales (11.37 vs 4.03).

Which has grown faster, TSLA or SOFI?

SOFI has the stronger growth profile, with three-year revenue CAGR of -2.9% for TSLA versus 28.8% for SOFI.

Which stock pays a bigger dividend?

TSLA yields 0.4% and SOFI yields 0.0%, so TSLA is the stronger income choice.

Related comparisons

• AAPL vs SOFI
• AAPL vs TSLA
• AMD vs SOFI
• MSFT vs SOFI
• NVDA vs SOFI
• SOFI vs BAC