SoFi (NASDAQ:SOFI) stock is down by about 20% over the past trading week, despite an earnings beat on both revenue and EPS. The decline has also been driven by regional banking fears amid a recent 25-basis-point interest-rate hike.
During the first quarter, SoFi reported revenue of $460.16 million and an EPS loss of 5 cents. Analysts polled by Refinitiv had expected $441 million of revenue and an EPS loss of 7 cents for the period.
CEO Anthony Noto said the following in the report:
“We also generated our third consecutive quarter of record adjusted EBITDA at $76 million, representing a 48% incremental EBITDA margin and a 16% margin overall, as well as a 54% incremental GAAP net income margin.”
Noto doesn’t seem to be too concerned with the recent price decline or regional banking pressure, as echoed by an almost $250,000 insider buy. Let’s get into the details.
CEO Anthony Noto Buys 50,000 Shares of SOFI Stock
On May 4, Noto purchased 50,000 shares of SOFI stock worth $236,705. The shares were purchased at an average price of $4.73. Following the transaction, Noto now owns a total of 6.35 million shares.
This isn’t Noto’s first purchase of SOFI this year. Following the collapse of Silicon Valley Bank, the CEO reported purchasing 45,000 shares at an average price of $5.39 per share. Before that, Noto reported purchasing 180,000 shares on March 10 at an average price of $5.52 per share. That brings his yearly purchase total to 275,000 shares.
Still, Noto seems to be the lone insider purchasing shares, as no other executive has purchased shares on the open market this year. Besides Noto, only two other insiders have transacted with SOFI on the open market in 2023. Both transactions were sales.
Wall Street analysts seem to match Noto’s conviction. The average price target for SOFI stock among 12 firms with coverage is $7.50, representing a roughly 50% increase from current prices. Following SoFi’s earnings, however, several research firms lowered their price targets.
- Credit Suisse lowered its price target to $7 from $7.50.
- Goldman Sachs lowered its price target to $6.50 from $7.50.
- Wedbush lowered its price target from $8 to $5.
Wedbush, which saw the steepest price target drop among the three above firms, attributed the decrease to possible “downside risk to its gain on sale margins and fair value marks of its loan portfolio.”
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.
