SoFi Technologies (NASDAQ:SOFI) stock represents a mobile-first company providing financial services to students and professionals. And while it looks like a great long-term investment, I’d wait for a pullback before investing.

SoFi provides mortgages, loans, credit cards, and other investment banking products. After a long and arduous process, the company finally debuted in May through a reverse merger with Chamath Palihapitiya-backed special purpose acquisition company (SPAC) called Social Capital Hedosophia Corp. V.

This was not only historic for them but also unprecedented in terms of the business model. Since debuting, SOFI stock has been up nearly 46%.

However, the price trend is also leading to concerns of overvaluation. In today’s competitive market, a company must sign on as many customers as it can to not just to win but also to retain power.

Large fintech platforms have been gaining popularity because their value only increases with every new user who signs up.

SOFI’s management team has done an incredible job of growing the company from 700,000 users in 2019 to over 2.9 million in 2021. But they still do not have a bank charter and operate in a highly competitive industry.

If you peruse the InvestorPlace page for this company, you will find innumerable articles that are bullish on this one, and if you have already bought shares in the company, this sentiment makes sense. There is little incentive to part with your investment at this stage.

However, if you want to buy more of this stock, wait for the right time. There is limited upside at the moment.

Growth Prospects Look Great

SoFi is looking at a tripling of its consumer base and an even more impressive quadrupling in revenues by 2025. Even for a high-growth industry, these are excellent numbers.

The reason why the company is confident it can deliver this growth is demographic change. This is not your parents’ generation. The shifting of capital from Baby Boomers to Millennials has the U.S. on the doorstep of a massive generational shift that will create an entirely new financial landscape.

SoFi is one of the companies best positioned today, capable of capturing this profound megatrend before it passes by.

The number of wealthy young adults in America is projected to grow dramatically over the next 10 years, but for now, they still struggle with handling their money. A major problem people face when it comes time make large purchases like homes or cars because many lenders do not offer loans unless you have a good credit history.

Millennials struggle with this and things like the financial crisis of 2007–2008 and the pandemic did not help matters for them.

SOFI’s strategy to attract low-risk, high-income Americans who feel underserved by traditional banks is the key to its long-term success. Few other banks have fee-free offerings and competitive yields. The rise of the “neobank” is very recent, but they are quickly taking over traditional banks.

Neobanks operate without physical locations and with few tangible assets, making them more agile than competitors. It is exactly the kind of flexibility needed to serve wealthy young Americans.

By the Numbers

SoFi made its stock market debut on June 1. This is a very young company. Financial data is scarce. We have just two earnings reports. Revenue and EPS beat estimates. However, analysts expected a healthier outlook. Hence, after the earnings report dropped, shares fell. But overall, though, the company did well in the quarter.

SOFI’s acquisition of Galileo continues to be a source of growth. It is expected that membership will grow over 130%, with 70 million paid members by 2021, and this reflects well on SOFI as they further invest in their newest venture.

SOFI is expected to finish with revenues of $1.01 billion in 2021. This would give them an annual growth rate of 58% higher than the last forecast, making it one of the fastest-growing publicly traded digital banks in America.

The one area of concern, though, is the student loans business. The moratorium on student loans expires Jan. 31, 2022, and students are going to wait to see what the government decides after that point.

Only then will some consider refinancing with SoFi or another option like it. In the meantime, the company has grown personal loan originations which has offset the decline in student loans.

Wait for Sofi Stock to Cool Down

There are several things to like about Sofi. An asset-light business, Sofi will only get better from here. Millennials are finally in their prime spending years.

It will have a major effect on bottom lines, and companies must develop a strategy to cater to this demand. SoFi is aggressively building out its product by making sure it enhances its product suite and making strategic acquisitions to take advantage of this generational shift.

In the long run, there is only one way to go for the company — upwards. However, the concerns regarding overheating do merit a discussion.

Since debuting, SoFi stock has had a dream run. Along the way, investors have made a significant amount of change. But when a company is trading at such high price multiples, as SoFi is, it is time to reflect.

If you already have this company in your portfolio, you don’t need to part with your investment. If you are looking to buy, it’s time to press pause and wait for a better time to invest in SOFI stock.

On the publication date, Faizan Farooque did not have (either directly or indirectly any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.