With a year-to-date decline of 71%, SoFi (NASDAQ:SOFI) is now a penny stock. The significant decline in its price makes SoFi stock look cheap. Moreover, its long-term fundamentals remain strong, making it an exciting investment at current levels.
Fintechs like SoFi that offer consumer lending products have lost substantial value in 2022 as rising interest rates had a negative impact on loan originations. Moreover, fear of an economic slowdown and its effect on delinquencies remained a drag.
While the rising interest rates are a concern and are negatively impacting SoFi’s home loan originations, the company continues to deliver solid revenue on the back of higher personal loan originations. Further, SoFi has consistently outperformed analysts’ expectations on the bottom line in the past several quarters.
Its new members and products continue to increase at a solid pace. Further, the momentum in personal loans and benefits from the approval of the bank charter (which will reduce its cost of capital and drive margins) are positives.
What Stands out is that the company’s CEO and Director, Anthony Noto, has been accumulating its stock. Our data shows that Noto acquired $7.4 million worth of SOFI stock in December.
Note that TipRanks offers daily insider transactions and a list of top corporate insiders. It also provides a list of hot stocks with either a Very Positive or Positive insider confidence signal.
Is SoFi Stock a Buy or Sell?
On TipRanks, SOFI stock carries a Moderate Buy consensus rating based on seven Buy and four Hold recommendations. Furthermore, analysts’ average price target of $7.18 implies an upside potential of 55.75%.
While it has positive signals from insiders and Wall Street analysts, hedge funds sold SOFI stock last quarter. Overall, it has a Neutral Smart Score of seven on TipRanks.
Bottom Line
The ongoing momentum in SOFI’s business and a top insider purchasing its stock are positive developments. However, the macro challenges could continue to keep SoFi stock volatile in the short term. Thus, investors with a short-term outlook should exercise caution. Besides SOFI, investors can leverage TipRanks’ Penny Stocks Screener to find penny stocks with a higher probability of beating the broader market.
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