SOFI Stock May be in for Yet Another Spike

  • SoFi Technologies (SOFI) shares may be slumping now, but a big catalyst may be just around the corner: the end of the student loan repayment moratorium.
  • A recent lawsuit filed by the fintech firm to end the pause underscores how much SoFi’s legacy business affects the bottom line.
  • Although the pause is expected to end later this year, the actual ending of it could still spark a big move higher for shares.
SOFI stock - SOFI Stock May be in for Yet Another Spike


SoFi Technologies (NASDAQ:SOFI) surged in January, because of both market and company-related factors. Since then, however, SOFI stock has pulled back. Macro uncertainties like inflation and interest rates are again putting pressures on shares.

Given the tendency for shares in this fintech firm/neo-bank to move on just moderately big news, there is something just around the corner that could spark another big jump higher. That would be the end of the student loan repayment moratorium, aka the “student loan saga.”

Sure, we expected the student loan moratorium to end later this year irrespective of current litigation.

Yet the resumption of student loan repayments does not necessarily mean investors will react to the official end to the pause with a yawn. Here’s why.

SOFI SoFi Technologies $6.47

SOFI Stock and the Latest Twist in the ‘Saga’

Originally slated to end on Dec. 31, 2022, the Biden Administration extended the Covid-era student loan pause yet again last November. This was in conjunction with its efforts to defend the constitutionality of the proposed student debt relief plan.

The Supreme Court has now heard oral arguments for the case. Legal experts expect the Court to reach a decision by late June. Even if the Court cannot reach a decision by this time, the last moratorium extension expires 60 days after a decision, or June 30, whichever comes first.

With this, SoFi is only a few months away from resuming its student loan refinancing operations. Still, the fintech/neo-bank has pursued legal actions of its own regarding the matter.

On March 3, SoFi sued in federal court, arguing that the latest extension is unlawful on “multiple grounds,” and should end immediately for borrowers not eligible for relief.

Right out of the gate, SoFi is catching flak for this latest move. SOFI stock even pulled back on the day this litigation became public knowledge. Nevertheless, I wouldn’t write off the chances of a post-“saga” rally happening for shares.

Why Shares Could Surge on the Official News

Sell-side forecasts for SoFi’s revenue and earnings results in 2023 and beyond already factor-in the “return to normal” for student lending later this year. To some, this may signal that the current SOFI stock valuation takes the end to the pause into account.

However, that may not stop the market from experiencing renewed enthusiasm for SOFI stock. Much like how SOFI made outsized moves following its latest quarterly results and updates to guidance, the resumption of student loan repayments (no later than Aug. 29, 2023) may spark another massive rally.

Jumpstarting SoFi’s legacy business will go a long way toward enabling this digital-first financial institution to hit GAAP profitability during Q4 2023.

SoFi claims that extending the pause from January to August means $25 million to $30 million in lost profits. That implies an additional $45 million in earnings on an annualized basis.

Better yet, this figure may not account for synergies attained from SoFi’s cross selling of its other financial services to existing and new student loan customers. Believing that the end of the moratorium will enable SoFi to keep beating expectations, even as macro challenges loom, investors could pile back into SOFI, causing another spike.

The Best Move Now With SOFI

There is a strong possibility that the end of the “student loan saga” catapults SOFI to higher prices. However, this does not mean you should run out and buy the stock today.

The latest remarks from Federal Reserve Chairman Jerome Powell regarding interest rates have the market skittish once more about growth stocks. In the immediate term, this stock could continue to pull back. That said, if SOFI coughs back the lion’s share of its post-earnings gains, you may want to consider jumping in, and not only for the opportunity for fast profits.

As I argued previously, SoFi Technologies could be a profitable long-term opportunity, as the company becomes consistently profitable, sporting a valuation reflective of its unique mix of banking and financial technology businesses.

With both near-term and long-term catalysts in mind, keep an eye on SOFI stock as a potential buy on additional weakness.

On the date of publication, Thomas Niel did not have (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.

Thomas Niel, contributor for, has been writing single-stock analysis for web-based publications since 2016.

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