SoFi Technologies (NASDAQ:SOFI) stock has attracted two price target cuts recently as Wall Street continues to reassess its third-quarter results. SoFi is an American online personal finance company that offers student loan refinancing, mortgages, credit cards, personal loans, and so on. Analyst Kevin Barker of Piper Sandler and Compass Point analyst Giuliano Bologna lowered their price targets on SOFI recently.
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As a very well-known fact, the personal finance market has been under immense pressure this year owing to the high-interest rate environment coupled with persistent inflation. SoFi’s student loan business is particularly being evaluated, as both originations and repayments have started to pick up modestly in Q3.
Analysts Remain Skeptical of SOFI Stock Recovery
On November 17, Piper Sandler’s Barker cut the price target on SOFI to $8.50 (23.2% upside) from $9 while reiterating his Hold rating. The analyst is encouraged by SoFi’s potential to earn increasing spread income on its growing asset base. At the same time, he believes that these tailwinds could be offset by higher net charge-offs (NCOs) and premium amortization of roughly $400 million on its personal loan portfolio.
Similarly, on November 20, Compass Points Bologna lowered the price target to $4 (42% downside potential) from $5 and maintained his Sell rating on SOFI.
SOFI CEO Goes Stock Shopping
On November 21, SoFi’s CEO and Director Anthony Noto made an Informative Buy transaction on SOFI shares. Noto bought 22,500 shares of SoFi Technologies at an average price of $6.50 per share. After the latest purchase, he now directly owns 7.26 million shares of the company.
Interestingly, the CEO’s purchase of the stock reflects his bullishness, while analysts are lowering their price targets. Corporate insiders usually have the best knowledge of the company’s progress, and with the CEO adding to his SOFI stock, it could only mean that he sees better days ahead.
Even so, overall, the TipRanks Insider Trading Activity tool shows that the Insider Confidence Signal is currently Neutral on SOFI stock. This is because corporate insiders have sold shares worth $3.9 million in the last three months.
Is SOFI Stock a Good Buy?
On TipRanks, SOFI stock has a Hold consensus rating based on four Buys, six Holds, and two sell ratings. The average SoFi Technologies price target of $9 implies 30.4% upside potential from current levels. Year-to-date, SOFI stock is up 53.3%.
Ending Thoughts
Analysts are skeptical about SOFI’s recovery after it has already gained so much this year. Simultaneously, the CEO is showing confidence in the stock’s future. SoFi’s management also raised its guidance for Fiscal 2023 owing to the resumption of loan origination. Only time will tell whether SoFi swifts past these challenges or succumbs to the pressure.
