Fintech companies have been experiencing significant momentum in 2023, thanks to several favorable developments, including the passage of the debt ceiling, the pause in interest rate hikes, and the Supreme Court’s ruling to end student loan repayment forgiveness. SoFi Technologies (NASDAQ:SOFI), a prominent fintech company, has particularly stood out with an impressive stock-price surge of about 100% since the beginning of the year. Furthermore, the average price target of top Wall Street analysts indicates slightly more upside potential.
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Here’s What Can Support SOFI Stock
The end of the moratorium on student loan repayments itself is expected to provide a boost to SOFI’s revenues going forward. This is because student loan refinancing remains a key part of its business. As a result of the ruling, student loan interest will start to accrue from September onward, and payments will be due starting in October.
Furthermore, the company’s move to get a banking charter has remained fruitful, as SoFi has been witnessing strong growth in its lending unit business. The company is enjoying robust demand for personal loans as clients seek to refinance their debt.
Also, it has been able to increase deposits with the help of its strategic model of offering lower-cost funding, which allows the company to provide higher rates than traditional banks. It is noteworthy that SOFI’s total deposits increased by $2.7 billion in the first quarter of 2023 from the prior quarter to exceed $10 billion.
Additionally, in the Q1 earnings call, management boosted its full-year 2023 guidance, which helps instill further confidence in the stock. It anticipates adjusted net revenue between $1.96 billion to $2.02 billion compared to the prior guidance range of $1.93 billion to $2 billion.
Interestingly, SoFI is set to release its second-quarter numbers on July 31, before the market opens. Currently, Wall Street expects the company to post a loss of $0.06 with revenues of $474.7 million.
What is the Price Target for SOFI Stock?
Overall, Wall Street’s top analysts are cautiously optimistic about SoFi and have awarded the stock a Moderate Buy consensus rating. This is based on three Buys and five Hold ratings assigned in the past three months. Also, the average SOFI price target of $9.27 implies 6.4% upside potential from current levels.
