Shares of SoFi (NASDAQ:SOFI) stock are in the green after Citi analysts led by Ashwin Shirvaikar resumed coverage of the stock with a price target of $11 and a “buy” rating.
Shirvaikar believes that SoFi’s recent debt-for-equity transaction should help improve its total risk-based capital ratio and expected GAAP income for the first quarter. Last month, the company announced and closed an agreement that saw it issue 72.62 million shares in exchange for $600 million of 0% senior convertible notes due in 2026.
In March, SoFi also agreed to offer $750 million of 1.25% convertible senior notes due in 2029, generating estimated net proceeds of $735 million. In addition, SoFi agreed to enter into capped call transactions with one or more purchasers of the notes. These calls cover the number of shares initially represented by the notes.
“Our fundamental (bullish) view on SOFI remains unchanged especially as its intended business diversification comes into focus, its ability to continue to attract deposits continues to prove itself out and investors focus on forward profitability,” said Shirvaikar.
SOFI Stock: Citi Resumes Coverage With $11 Price Target
Sustained profitability is a major goal for SoFi. During Q4, the company reported solid revenue growth of 34% to $594 million. GAAP EPS tallied in at two cents, marking the first profitable quarter since the company became publicly traded. GAAP EPS is forecasted to be positive for all four quarters of 2024, while 2024 revenue growth is expected to be 15.48% compared to 34.63% in 2023.
On TipRanks, Shirvaikar is ranked at #1,227 among 8,789 Wall Street analysts. He carries a success rate of 56% and an average one-year return of 5.40%.
SoFi has confirmed that it will report its Q1 earnings on Monday, April 29, before the market opens. For the quarter, analysts are forecasting revenue of $565 million, signaling growth of 22.89%. GAAP EPS is expected to be one cent, while GAAP net income is expected to be $14 million.
In its Q4 earnings report, SoFi had guided for between $550 and $560 million in adjusted net revenue and GAAP net income between $10 and $20 million.
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.
