Emily Dattilo
It's been a tough few weeks for SoFi Technologies, but the fintech has a new bull.
Needham analysts led by Kyle Peterson initiated coverage of SoFi stock with a Buy rating and $10 price target on Wednesday.
SoFi began as a lender focused on refinancing debt but now operates through three segments: lending, which includes student, personal, and home loans; financial services; and a technology platform.
"We view SOFI as a long-term winner in the digital lending/neobank space, largely due to its focus on prime and super-prime consumers and possession of a full banking license, which we believe provides the company superior unit economics compared to other consumer finance platforms that focus on lower income borrowers and/or lack a banking license," the Needham analysts wrote.
That dose of optimism is welcome news to investors, who have had a front-row seat to the stock's roller-coaster performance.
SoFi stock surged 116% in 2023, and soared 20% on Jan. 29 after the company posted its first-ever quarterly profit. However, then plans for a capital raise sparked worries of potential dilution, sending shares down 15% on March 5, their worst one-day decline on record, according to Dow Jones Market Data.
SoFi shares were rising 1.1% to $7.28 in premarket trading Wednesday, while S&P 500 futures are down 0.2%. Coming into the session, the stock has dropped 28% this year.
Of the analysts covering SoFi, 22% have Buy ratings, according to FactSet; the same percent are at Sell, and the rest, 56%, are at Hold.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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April 03, 2024 08:58 ET (12:58 GMT)
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