SoFi Technologies Analyst No Longer Bearish After Stock Loses 24% Year To Date (CORRECTED)

Editor's note: The headline of this story has been corrected to accurately reflect Keefe, Bruyette & Wood's ratings change on SoFi from Underperform to Market Perform. 

Shares of SoFi Technologies Inc (NASDAQ: SOFI) were climbing in early trading on Friday, amid optimism around its consumer lending business.

While concerns remain around the sustainability of the company’s earnings and capital over the long-term, the 25% decline in the share price year-to-date and recent capital raise lower the near-term downside risks, according to Keefe, Bruyette & Woods.

The SoFi Technologies Analyst: Timothy Switzer upgraded the rating for SoFi Technologies from Underperform to Market Perform, while raising the price target from $6.50 to $7.50.

The SoFi Technologies Thesis: The recent capital raise allows the company SOFI to maintain its balance sheet growth in 2024, Switzer said in the upgrade note.

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“Assuming a stable macro environment, SOFI should now be able to maintain its pace of originations (crucial to supporting revenue given the immediate FV mark benefit) for a full year without needing to raise capital or find a meaningful purchaser of its loans,” the analyst wrote.
“Company fundamentals in 2024 are also likely to be supported by improving profitability in the Financial Services segment and accelerating revenue in the Technology segment as new partners ramp up,” he added.

Switzer further stated that the steep decline in the stock so far this year partially limits downside risk.

SOFI Price Action: Shares of SoFi Technologies had risen by 1.16% to $7.40 at the time of publication on Friday.

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