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Why Is SOFI Stock Up 10% Today?

  • SoFi (SOFI) stock seems to be moving alongside the general market today.
  • Looking forward, the resumption of federal student loan payments will be a huge catalyst for the company.
  • SOFI stock is down more than 60% year-to-date (YTD).
SoFi Technologies corporate building shown next to neighboring skyscraper during the daytime
Source: Vi

SoFi (NASDAQ:SOFI) stock is surging higher today along with the rest of the market. There appears to be no company-specific news to explain this rise. Rather, SOFI stock is most likely moving in correlation with the general market.

This rise is a relief for SOFI stock investors. Earlier this month, shares of the company hit a 52-week low of $4.77 per share. That’s a far cry from the 52-week high of $24.65.

Notably, SoFi will soon receive a major positive catalyst in the form of restarted federal student loan payments. Specifically, the student loan moratorium will officially end on Dec. 31, with payments resuming the following day. During the second quarter, student loans accounted for about 12.5% of origination volume, with each loan having an average balance of $48,474. Meanwhile, personal loans accounted for 77.2% of origination volume and home loans accounted for 10.3%.

Why Is SOFI Stock Up 10% Today?

SoFi confirmed that it will report third-quarter earnings on Nov. 1 before the markets open. For the period, analysts expect revenue of $392.76 million, which would represent 56% year-over-year (YOY) growth. Earnings per share is expected to come in at a loss of 10 cents as well. A year ago, SoFi reported an EPS loss of 5 cents. Lastly, revenue guidance for Q4 is $431.74 million while EPS is expected to be a loss of 9 cents.

Across the board, analysts seem to be bullish on SOFI stock. Shares of the company have an average price target of $8.29 among 12 firms with coverage of the stock. That implies upside of more than 40% from current prices. The highest price target is set at $11 per share while the lowest is $6. In addition, the most recent analyst update comes from Oppenheimer, which lowered its price target to $7 from $8 yesterday.

That said, Mizuho still leans bullish toward SOFI stock with a “buy” rating and a price target of $8 per share. After speaking with SoFi CFO Chris Lapointe and Maura Cyr of investor relations, analyst Dan Dolev released an encouraging note. Dolev was impressed by the company’s high-FICO score borrowing standards, rate hike hedging strategy and low loan losses. He also said Galileo’s transaction-based pricing model provides the platform with “protection against a weaker economy.” Overall, the analyst believes SOFI stock is a strong buy..

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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 Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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