SoFi Technologies (SOFI) is off to an excellent start this week. Shares have been rising steadily all morning after the fintech startup announced that it has entered into a $2 billion loan platform agreement with Fortress Investment Group. As of this writing, SOFI stock is up 11% for the day. News of the $2 billion loan pact is helping SOFI stock sustain last week’s momentum that kept it mostly in the green.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
As part of its business model, SoFi both refers pre-qualified customers to loan origination partners and originates loans itself. Under the agreement, SoFi will be able to expand its lending capabilities even further.
What’s Happening with SoFi Stock?
SOFI Stock is currently in the green for the month after spending most of the past month trending upward. But news of the loan agreement has spiked its biggest surge of the week. This market response makes sense, as lending is one of SoFi’s three primary segments.
Now, these operations are poised to continue driving growth and helping SoFi reach more users. In a statement released this morning, SoFi CEO Anthony Noto indicates that the company’s leadership predicts further demand for its lending platform.
“SoFi’s loan platform business is an important part of our strategy to serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue,” he states. “We’re pleased to see continued strong demand for SoFi’s loan platform business. Fortress’ collaboration, seamless execution, and appreciation of the platform’s value proposition makes them an exceptional partner.”
Is SOFI Stock a Buy, Sell, or Hold?
Despite SoFi’s recent surge and persistent growth, Wall Street sentiment toward it remains mixed. Analysts have a Hold consensus rating on SOFI stock based on five Buys, six Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 22% rally in its share price over the past year, the average SOFI price target of $8.27 per share implies an almost 20% downside potential.
However, there may be reason to be optimistic about SoFi’s growth prospects. TipRanks contributor Bernard Zambonin recently made a bullish case for SOFI stock, highlighting the company’s noticeable revenue growth and strategic diversification. In addition, he noted that SoFi’s lending business has proven resilient. Now, the $2 billion loan pact with Fortress is likely to make it even stronger.
