Compass Point starts SoFi with a Sell, calls ‘difficult to justify’ owning

As previously reported, Compass Point analyst Giuliano Bologna initiated coverage of SoFi Technologies with a Sell rating and $5 price target, calling the post debt-ceiling rally in the stock “overdone.” The firm believes it is “difficult to justify” owning the stock at current levels with the potential for the balance-sheet growth rate to slow over the next few quarters and credit costs to increase materially with portfolio seasoning before accounting for credit-deterioration risks, the analyst tells investors. The company’s fair-value accounting treatment for loans, which was a benefit during SoFi’s period of significant growth, creates a back-end margin overhang, the analyst added.