Shares of SoFi Technologies, Inc. (NASDAQ:SOFI) experienced an upward movement on Monday after Citizens released a note highlighting an “outperform” rating for the stock and setting a target price of $30.
Citizens Discusses Growth Opportunities
Analyst Devin Ryan from Citizens pointed out that the recent downturn in tech stocks has created new chances for companies operating in areas like blockchain technology, business banking, and loan platforms. He mentioned that SoFi’s stock has dropped from a high of over $30 last year to roughly $21 now, which might present a good investment opportunity.
Analysts also noted that SoFi’s fundamentals are looking stronger, with a 35% increase in membership year over year, nine straight quarters of GAAP profitability, and over $3 billion in new capital added since last year’s second half.
Citizens Highlights “Three Pillars” Investment Strategy
A recent report from SoFi indicates that 40% of new products were opened by existing members. According to analysts, this trend highlights the company’s growing flywheel effect, largely thanks to its direct deposit relationships.
The diversification of SoFi’s revenue streams has been accelerating, as fee-based revenue represented half of its total earnings last year. Moreover, the lending sector is also expanding. Citizens believes SoFi is quickly evolving from just being a lender to becoming a comprehensive platform.
Ryan’s memo also pointed out that SoFi is the first state-chartered bank to offer consumer crypto trading and its own stablecoin on a public blockchain. He emphasizes SoFi’s strategic advantage in cryptocurrency and tokenization, noting its extensive customer base, profound technological understanding, cross-platform integration capabilities, and access to tokenizable assets in investments and loans.
He added that AI is viewed as a versatile tool within the company, which could potentially boost engineering, product launches, and customer acquisition in the future.
“In summary, we believe the stock’s rating has been adjusted down even amid ongoing business growth,” the analyst concluded.
SoFi Stock Performance to Start the Week
SOFI Price Action: As of Monday’s closing, SoFi stock rose by 2.78%, reaching $21.44. Currently, it is trading 34.3% below its 52-week high, with prices fluctuating between a low of $20.80 and a high of $21.48. The relative strength index (RSI) stands at 31.5, indicating somewhat weak momentum.
