- Piper Sandler upgraded SoFi to “overweight”
- However, the firm also lowered its price target to $10
- Shares of SOFI stock are up 4% today
Shares of SoFi (NASDAQ:SOFI) are in the green today after an analyst from Piper Sandler upgraded the company from “neutral” to “overweight.” Shares of SOFI stock have lost more than 50% since the year began.
Last week, SoFi accidentally released its Q1 earnings early by a few hours. Revenue came in at $322 million, beating consensus estimates of $286 million by a wide margin. Meanwhile, earnings per share (EPS) came in at a loss of 14 cents, while analysts were expecting a loss of 15 cents. Still, revenue guidance for the second quarter was shaky. The fintech company guided for between $330 million and $340 million. Analysts were expecting revenue of $343.7 million.
With that in mind, let’s jump into the details of the upgrade.
Piper Sandler Upgrades SOFI Stock
While analyst Kevin Barker upgraded SoFi to “overweight,” he also reduced his price target from $12 to $10. The analyst acknowledged that rising rates may cause headwinds for the company. However, Barker believes that the market is “over-discounting” the stock. In addition, he also believes that earnings before interest, taxes, deductions and amortizations (EBITDA) will improve during the second half of the year and into 2023.
In April, President Joe Biden extended the moratorium on federal loans until Aug. 31. Barker believes that SoFi will benefit from people looking to refinance their loans once the moratorium is over. He added, “The combination of rapid growth in deposits, the expiration of the student loan moratorium, and revenue growth in the financial services segment should lead to significant earnings momentum throughout 2023 and 2024.”
With Barker’s upgrade in mind, let’s take a look at how other analysts view SoFi.
Analysts Chime In on SoFi
- Mizuho has a price target of $14. Analyst Dan Dolev characterized SoFi’s earnings as “very strong” and believes that EBITDA growth is “very achievable.” Dolev stated that the company’s Q2 revenue was a bit weak versus consensus estimates. However, he believes the focus should be on key performance indicators trending upward, growth in personal loans and strong full-year guidance in terms of revenue and EBITDA.
- Morgan Stanley has a price target of $10. Analyst Betsy Graseck believes the federal student loan moratorium will continue until Q1 of next year. Based on this, Graseck cut her full-year student loan refinance projections by ~20% to $4.1 billion. The analyst also noted that SoFi’s mortgage business is taking longer than expected to ramp up.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
