SoFi (NASDAQ:SOFI) stock is in the red today despite the company reporting excellent fourth-quarter earnings yesterday and receiving an upgrade from Deutsche Bank analyst Mark DeVries. DeVries raised his price target to $12 from $11 while maintaining a “hold” rating.
DeVries is a highly ranked analyst on TipRanks. Among the 8,695 Wall Street analysts tracked by the site, DeVries come in at 149. He carries a success rate of 63% and an average one-year return of 16%.
SOFI carries an average price target of $9.25 among 18 analysts with coverage of the stock.
SOFI Stock: Deutsche Bank Raises Price Target to $12
DeVries first initiated coverage of SOFI stock on Jan. 10 with a price target of $11 and a “hold” rating. At the time, the analyst explained that his “hold” rating was due to “limited visibility on tech platform growth needed to support the valuation.” He added that the key to SoFi’s growth lies in its opportunities outside of lending.
DeVries also stated that SOFI traded like a tech business despite most of its revenue coming from consumer lending. Tech businesses tend to trade at relatively higher valuations than other kinds of businesses.
With its earnings, SoFi provided more visibility on its tech platform growth. During Q4, the company’s tech platform segment generated revenue of $96.9 million, up by 13% year-over-year (YOY). That brought the segment’s 2023 full-year revenue to $352.3 million, up by 12% YOY.
“There is a robust pipeline of ongoing discussions with potential partners with large existing customer bases across both the U.S. and Latin America spanning both the financial services and non-financial services segments,” said SoFi.
Furthermore, the segment’s contribution profit tallied in at $30.6 million, up by 81%. Likewise, 2023 full-year contribution profit was $94.8 million, up by 24%. These numbers may have influenced DeVries to raise his price target.
DeVries wasn’t the only analyst to raise his price target following earnings. Goldman Sachs analyst Michael Ng raised his target to $8 from $7 while maintaining a “neutral” rating.
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.
