SoFi Technologies (NASDAQ: SOFI) stock declined modestly on Monday after Piper Sandler downgraded its price target.
Piper Sandler has revised its price target for SoFi Technologies (SOFI), lowering it to $8.00 from the previous $8.50 while upholding a Neutral rating on the stock. This revision comes after a comprehensive examination of SoFi’s 2023 10-K filing and recent statements from company management.
The analysis by Piper Sandler has brought attention to anticipated challenges within SoFi’s Lending segment. These challenges include a deliberate slowdown in growth, an uptick in Net Charge Offs (NCOs), and premium amortization on the personal loan portfolio.
However, amidst the projected turbulence in the Lending sector, there are positive indications of expansion in other facets of SoFi’s operations. Forecasts indicate significant growth in the Financial Services and Technology sectors, with management anticipating a 50% upswing in 2024. This growth is considered crucial for counterbalancing the slowdown in the lending business.
The analyst from Piper Sandler voiced confidence in SoFi’s evolving business model, which has evolved to become more diversified. This diversification enables the company to offset the impact of a slowdown in one segment through the performance of others. The analyst highlighted that this strategic positioning better equips SoFi to navigate sector-specific challenges.
Piper Sandler views SoFi as trading at fair value. The current trading price is around 14 times the forecasted FY25 operating P/E and 3.4 times the Price to Revenue ratio.
SoFi Technologies (NASDAQ: SOFI) Stock Price Action
SOFI stock dipped 0.39% to close at $7.68 on Monday. The traders had exchanged hands with 58,246,879 (58.24 million) shares compared to the average daily trading volume of 56.64 million.
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