SoFi Technologies (NASDAQ: SOFI) has plunged approximately 73% from its 52-week high. Despite this massive fall, shares of this financial technology company have a Neutral Smart Score of 6 out of 10 on TipRanks, meaning it is unlikely to underperform the general market.
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Why does the Smart Score Matter?
A Smart Score is TipRanks’ data-driven, quantitative scoring system. It analyses a stock on eight major parameters, including analysts’ recommendations and signals from insiders and hedge funds, to name a few, and assigns a Smart Score ranging from 1 to 10. A stock with a higher score is more likely to outperform the broader market averages.
The chart below shows that the stocks with top Smart Score stocks generated positive alpha and handily beat the S&P 500 Index (SPX).
Here’s How SoFi Stacks up on Smart Score Parameters
SoFi stock has received six Buy and five Hold recommendations for a Moderate Buy rating consensus on TipRanks. Meanwhile, the average SoFi price target of $9.09 implies 37.31% upside potential.
Analysts’ cautiously optimistic outlook is based on the uncertainty related to the refinance volumes amid a weak macro environment.
While analysts are cautiously optimistic about SOFI stock, corporate insiders have accumulated it on the recent decline. According to TipRanks’ Insider Trading Activity tool, corporate insiders bought SOFI stock worth 2.7M in the last three months.
SOFI stock has negative indicators from hedge funds and retail investors. Per TipRanks’ Hedge Fund Trading Activity tool, hedge funds sold 131.4K SOFI stock in the last quarter. Meanwhile, 1.3% of TipRanks’ investors have lowered their holdings in one month.
Bottom Line
SoFi continues to benefit from solid member and product growth. Moreover, the approval of the bank charter should lower its dependency on external finance and reduce its cost of capital. However, fear of an economic slowdown could restrict the upside in the near term. Also, TipRanks’ neutral Smart Score indicates that SOFI stock could perform in line with the broader market averages.