Ken Shih, an analyst from DBS, maintained the Buy rating on SoFi Technologies (SOFI – Research Report). The associated price target is $18.50.
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Ken Shih has given his Buy rating due to a combination of factors that highlight SoFi Technologies’ strong growth potential and strategic positioning. The company has demonstrated impressive financial performance with a 30% year-over-year increase in adjusted net revenue and a 9% rise in EBITDA, driven by robust deposit growth and fee income. SoFi’s ambitious medium-term guidance projects a 20%-25% revenue compound annual growth rate through 2026, with earnings per share expected to reach between USD 0.55 and 0.8.
SoFi is well-positioned to compete with traditional banks by targeting tech-savvy millennials, offering low fees, competitive rates, and user-friendly applications. The company’s banking license enables it to provide comprehensive financial services, build its deposit base, and generate interest income. Additionally, SoFi has effectively managed delinquency rates, with a notable decrease in the 90-day personal loan delinquency rate. The company’s strong growth in financial services and well-controlled funding costs support the expectation of over 40% CAGR in EBITDA during FY24-26F, justifying the Buy rating and a target price of USD 18.5.
In another report released on April 30, Mizuho Securities also maintained a Buy rating on the stock with a $20.00 price target.