Does the Recent Pullback in SoFi Technologies Stock Present a Buying Opportunity?

SoFi Technologies (SOFI) has declined about 7% over the past month and is down nearly 14% year-to-date. While the fintech and digital bank delivered market-beating first-quarter results, analysts have mixed ratings on the stock. In fact, the consensus rating indicates that Wall Street is sidelined on SOFI stock, and several analysts don’t see the pullback in SoFi Technologies stock as a buying opportunity due to macro challenges, elevated valuation, and intense competition in the fintech market.

Analysts Are Divided on SOFI Stock

At the recently held JPMorgan Global Technology, Media, and Communications Conference, SOFI CEO Anthony Noto said that the company expects more than 30% annual member growth and mid-to-high 20% revenue growth, while reiterating a goal to reach 50 million members within five years.

While several analysts acknowledge SOFI’s solid execution in recent quarters, as reflected in its robust growth rates and continued expansion of its membership base, others are concerned about the company’s ability to sustain the momentum amid macro uncertainties and intense competition in the fintech space. Some analysts have also noted the unimpressive performance of SoFi’s Technology platform compared to the stellar growth in the Financial Services business. Additionally, SOFI stock trades at a forward P/E (price-to-earnings Non-GAAP) of 47.6x, which is way higher than the sector average of 10.9x.  

Following the Q1 results, Bank of America analyst Mihir Bhatia highlighted continued momentum in SoFi Technologies’ business but reiterated a Sell rating on SOFI stock with a price target of $13. The 5-star analyst contends that SOFI stock is priced for perfection, making him “pause in an uncertain macro backdrop.”

Recently, KBW analyst Tim Switzer also reaffirmed a Sell recommendation on SoFi Technologies stock with a price target of $9, reflecting more than 32% downside potential.

In contrast, DBS analyst Ken Shih reiterated a Buy rating on SOFI stock with a price target of $18.50, which indicates an upside potential of 39.4%. The 5-star analyst noted SoFi Technologies’ impressive Q1 performance, supported by solid deposit growth and fee income. He believes that the company is well-positioned to compete with traditional banks, given that it targets tech-savvy millennials and offers low fees, competitive rates, and user-friendly applications. Shih also highlighted SOFI’s banking license that enables it to provide extensive financial services, its ability to effectively manage delinquency rates, and well-controlled funding costs. 

Is SOFI Stock a Buy, Hold, or Sell?

To summarize, Wall Street has a Hold consensus rating on SoFi stock technologies based on six Buys, four Holds, and three Sell recommendations. The average SOFI stock price target of $14.05 implies a limited upside potential of about 6% from current levels.

See more SOFI analyst ratings