Shares of the financial services company SoFi Technologies (NASDAQ: SOFI) have corrected over 72% from the 52-week high. The extension of the student loan moratorium and macro headwinds impacting consumer demand weighed on its student loan originations and stock price.
Notably, during the last reported quarter, SoFi announced that its student loan originations are now below 50% of pre-Covid levels.
While SoFi stock has trended lower, its top insiders have accumulated its stock. Per its recent SEC filings and TipRanks’ Insider Trading Activity tool, its CEO, Anthony Noto, acquired SOFI shares worth about $1.1 million in one month.
Besides Noto, SoFi’s Director, Harvey Schwartz, acquired SOFI stock worth $97,500.
What’s worth mentioning is that these transactions were Informative Buy (transaction where insider buys shares with their own capital, signaling greater confidence in the company’s prospects).
The move comes at a time when SoFi stock has lost substantial value. However, it continues to deliver strong financial and operating performances led by stellar growth in its member base, products, and Galileo (its tech platform) accounts. It also continued to deliver positive adjusted EBITDA over the past several quarters.
Also, SoFi has received the much-awaited banking license this year, which will drive its cost of capital lower and support margin expansion.
Bottom Line
SoFi stock has corrected significantly as near-term headwinds could impact originations and refinance volumes. However, with top insiders buying its stocks and continued strength in its key performance indicators, including solid member and product growth, point to a healthy future.
Also, the approval of the bank charter is a big positive as it will reduce its dependence on outside capital and lead to a decline in costs, thus supporting its profitability.
Due to the ongoing momentum in the base business, SoFi raised its full-year revenue guidance. It now expects its 2022 adjusted revenues to be between $1.505 billion to $1.510 billion, up from its previous guidance of $1.47 billion.
SoFi stock has received seven Buy and four Hold recommendations for a Moderate Buy consensus rating. Furthermore, SoFi’s average price target of $10.23 implies 49.1% upside potential.
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