Finding the right balance between a global giant and a rising digital challenger is a common challenge for investors. Mastercard (NYSE:MA) and SoFi Technologies (NASDAQ:SOFI) offer two very different ways to play the financial sector.
Mastercard runs a global toll road for transactions, collecting fees without taking on credit risk from cardholders. SoFi operates as a digital-first bank, cross-selling lending and savings products to a growing member base. Both companies are navigating a changing economy where digital payments and online banking are becoming the standard for consumers everywhere.
The case for Mastercard
In its latest annual report, filed for FY 2025, the company highlighted its role as a global payments technology provider that enables electronic payments for billions of people. It facilitates these transactions by connecting consumers, financial institutions, and merchants across more than 220 countries and territories. Its primary customers are issuers and acquirers that utilize the network to process payments in over 150 different currencies without the company taking on direct credit risk.
For FY 2025, revenue reached nearly $32.8 billion, representing a growth rate of approximately 16.4% over the prior year. The company generated net income of roughly $15.0 billion during this period, demonstrating its ability to convert high volumes into significant earnings. Its net margin was approximately 45.6%, which reflects a high level of efficiency in managing its global payment infrastructure.
As of its December 2025 balance sheet, the debt-to-equity ratio was 2.5x. This metric compares total debt against shareholder equity to evaluate how much the company relies on borrowed funds. The company also reported a current ratio of 1.0x and generated nearly $16.4 billion in free cash flow, which represents the cash remaining after covering both operations and essential capital expenditures.
The case for SoFi Technologies
In its latest annual report, filed for FY 2025, SoFi described its integrated digital platform that helps its 17.1 million members borrow, save, spend, and invest. Beyond its consumer-facing app, it offers B2B technology services through its Galileo and Technisys divisions to other fintech stocks and traditional banks. These platform services provide critical infrastructure for payment processing and stablecoin settlement, with partners including Mastercard and various loan purchasers.
In FY 2025, revenue reached approximately $3.6 billion, which was a jump of close to 35.1% compared to the previous fiscal year. The company reported net income of nearly $481.3 million, marking a successful pivot toward consistent profitability as it expanded its product suite. This resulted in a net margin of approximately 13.3%, which shows the company’s progress in monetizing its growing member base.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.2x. The company reported a current ratio of approximately 0.2x, which measures its ability to meet short-term obligations with assets that can be quickly converted to cash. Free cash flow was negative $4.0 billion as the company continued to invest heavily in its lending capital and the expansion of its financial services ecosystem.
Risk profile comparison
Mastercard faces significant regulatory and legislative risks, particularly regarding interchange fee regulations and data localization requirements that vary by country. It must also navigate intense competition from traditional networks like Visa (NYSE:V) and emerging government-backed digital payment systems. Additionally, the company is a frequent target for cyberattacks and remains involved in ongoing antitrust litigation related to merchant fees and surcharging practices.
SoFi Technologies operates under strict oversight from the Federal Reserve and other agencies as a bank holding company, which requires it to maintain specific capital levels. Fluctuations in interest rates pose a direct risk to its loan demand and the fair value of its existing personal and student loan portfolios. The company also faces potential losses from member defaults and relies heavily on third-party cloud infrastructure to maintain its digital-first platform.
Valuation comparison
SoFi Technologies appears to be the more attractively priced option for investors seeking a lower entry multiple based on future Forward P/E earnings estimates.
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy for 2027?
I’d go with Mastercard because it combines the reach of a global payments leader with strong growth and rising profits. Revenue rose 14% in Q3, and roughly $0.60 of every revenue dollar turned into operating profit. It runs one of the world’s largest payment networks, with billions of cards in use and trillions of dollars flowing through it every quarter, and that volume is still growing.
In its recently reported Q3 2026 results, Mastercard topped forecasts again and the stock climbed. Some of the strength came from deals pulled forward from the fourth quarter, but its services business grew faster than its core network, and management expects growth to stay positive. That sets it up well for 2027.
To its credit, SoFi grew revenue far faster than Mastercard in Q3 and gave 2027 guidance above Wall Street’s forecasts. But it is a lender, so its results depend on borrowers paying back and on interest rates, and its stock is still down sharply this year. Mastercard earns money whenever people spend, whatever they are buying. That steady, high-margin position is why Mastercard is my pick.
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Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool has a disclosure policy.
Mastercard vs. SoFi Technologies: Which Financial Stock Is a Better Buy for 2027? was originally published by The Motley Fool
