Shares of the financial technology company SoFi (NASDAQ:SOFI) are trending lower and are down about 30% year-to-date. As SoFi stock continues to slide and is heading towards penny-stock (learn more about penny stocks here) levels, we wonder what the Wall Street analysts are suggesting about its prospects.
But before we proceed, it’s worth noting that the high-interest rate environment raised concerns about SoFi’s loan origination and credit quality, taking a toll on its share price. Further, the company’s decision to raise capital through convertible senior notes raised concerns among investors over potential capital dilution, leading to a notable drop in its share price.
With this backdrop, let’s zoom in on analysts’ recommendations for SoFi stock.
What Do Analysts Say About SoFi Stock?
Wall Street remains sidelined on SoFi Technologies stock despite its solid financial performance, growing deposit base, low cost of capital, and focus on improving profitability. Deutsche Bank analyst Mark DeVries finds SoFi stock cheap. However, the analyst lowered the price target on SOFI to $11 from $12 on April 30, citing a lack of catalyst. DeVries suggests a Hold on SoFi stock.
Another analyst, David Chiaverini of Wedbush, is bearish about SOFI stock, citing weakening credit quality. Chiaverini reiterated a Sell on SoFi stock on April 30. His price target of $4 implies a 42.36% downside potential from current levels.
Overall, SOFI stock has a Hold consensus rating with five Buy, nine Hold, and two Sell recommendations. Analysts’ average price target on SOFI stock is $9.21, implying 32.71% upside potential from current levels.
Bottom Line
SoFi stock could remain under pressure due to prolonged high interest rates and concerns over credit quality. Nonetheless, the company is performing well and will likely benefit from its growing net interest income, high-quality deposit base, and lower funding costs.
While Wall Street is sidelined on SOFI stock, investors can look for other attractive investment opportunities by leveraging TipRanks’ penny stock screener.
