SoFi Stock Forecast 2022, Target Revised Lower to $8

SoFi Stock Forecast 2022: Highlights
SoFi Stock Forecast 2022: Shares of SoFi Technologies Inc (Nasdaq: SOFI) are expected to trade between $6.0 and $6.2. The overall recommendation is Sell.
-The average 12 month target for SoFi is $8.
Positives: Great Business Model, Customer Acquisition is Strong, better than expected Quarterly results
Negatives: Pause in Student Loan Repayments, Increase in interest rates.

SoFi stock Forecast 2022: Latest Price

SoFi stock Forecast 2022: Performance Chart

Stock Name5 Days1 MonthYTD
SOFI Stock-0.19%-0.74%-77%

SoFi stock Forecast 2022: Comparison with Peers

ParameterSoFi Technologies IncCredit Acceptance CorporationUpstart Holdings IncOneMain Holdings IncSLM Corporation
Market Cap5.0 B7.1 B2.3 B5.23 B4.4 B
Revenue Growth YoY46.10%-3.60%34.20%8.80%5.40%
EPS  Diluted (YoY) -1.0059.521.439.873.61
Net Operating Cash Flow2.7M1.2M168.4 M2.2 B-32.4 B
Data as of 21.03.2022, considering financials up to 31st December 2021

SoFi stock Forecast 2022: Technical Recommendation

SoFi stock Forecast 2022: Latest Video

YouTube video

Google Search Volume for SoFi Stock is higher within past few days.

Sofi Stock Forecast: Latest News

Volatility in price and trading volume : On 1st November, the company announced better than expected Quarterly results due to which there was a leap in the stock price. However, Goldman Sachs downgraded the stock’s price from target from $8.50 to $7.50 with a neutral rating which led to significant sell out.

Resumption of loan repayment: Sofi’s major part of its business is based on refinancing student loans, which was stopped during covid times, and recently, the U.S government announced that student loan repayments will be resumed from January 2023. This resumption of repayments will be very beneficial to the company and the stock price can shoot up.

Galileo Financial Technologies expanded: Galileo financial technologies, the popular platform owned by Sofi to help customers in setting up customer accounts, expanded its Galileo Risk platform with Datavisor to reduce frauds and increase rapid responses to customers while reducing risks.

Sofi launched a new hub: Sofi launched a digital content hub “On the Money” to help consumers help with their finances.

Sofi announced Multi-Year Partnership: Sofi announced a 3-year partnership with Los Angeles Chargers Quarterback Justin Herbert. Herbert will receive an equity stake and will appear in SoFi’s new brand campaign. This year, Sofi became a top-searched brand during Super Bowl LVI.

Sofi Stock Forecast: Q3 Results

SOFI released its Quarter 3 (which ended on September 30, 2022) results in November 2022.

The company’s total revenues were declared as $407.7 million, up 51.2% Y-o-Y.

Its net interest income is $157.9 million, up 118.1% Y-o-Y.

Operating expenses increased by 61.6% Y-o-Y and were reported as $482.1 million,

The company’s operating income decreased by 159.9% over a year and was reported as -$74.5 million.

Its net income was -$74.2 million, down 147% Y-o-Y.

Revenue per share was $0.44, up 33.3% Y-o-Y.

Diluted earnings per share (EPS) were declared as -$0.08, down 60% Y-o-Y.

Bank of America Securities analyst Mihir Bhatia upgraded the rating to Buy from Neutral. He said that the recent student loan repayment resumption can lead to meaningful catalyst growth in future quarters.

SoFi stock Forecast 2022: Bull Case

  • SoFi Technologies has an innovative product line – SoFi Technologies was founded in 2011 with the primary intention to make student loans cheaper and provide a cheap, reliable, and memorable experience to retail customers. SoFi is doing it year after year and that makes it one of the top choices to take online loans across America.
  • SoFi is the leader in its space – Although it is true that there are many other companies trying to revolutionize the customer banking experience, SoFi technologies stands out among the pack. It is evident by the fact that SoFi has 3.5 million users on its app, while the others have only a few thousand users. More importantly, SoFi is growing at a rate of nearly 500,000 users per quarter.
  • Better than expected Q2 2022 results – SoFi declared Q2 results on August 2, 2022, and it did beat market expectations on a number of fronts
    • EPS came at -0.12
    • The company reported fourth-quarter EBIDTA to $20 million and annual EBIDTA to $29 million
    • Revenue has shown commendable growth to $356.1 million.
  • Well-positioned for future growth – Currently America has 210 million adults. Considering only 20% market share of SoFi Technologies by 2030, it comes to around 42 million. With just a 3.5 million user base, the opportunity to grow is immense.

SoFi stock Forecast 2022: Bear Case

  • Bad Global Sentiments – The global stock markets are in the bear territory since the fag end of November. In the last six months, SoFi is down 46%.
  •  High Growth Momentum stocks are losing their spree- If we look carefully, in this bear market, the ones with maximum loss are recent initial public offerings in partnerships with SPACs. Growth stocks with high momentum are the worst hit in this bear market. Also, stocks with lofty valuations carrying a hope for the future are the first ones to lose their gains in the market corrections.
  • Increase in interest rates –Fed Chairman Jerome Powell indicated that Fed will remain hawkish till inflation comes in control. And yes indeed, fed has increased interest rates on multiple occasions through-out the year. Although, high interest rates are good for Sofi, but it reduces the demand and US is still struggling with the possibility of a deep recession. In such scenarios, Sofi is not expected to do great business. Sofi is a good company, but the macroeconomic factors are not in the favour of company’s growth. Sofi business is expected to be back on track in 2023 when inflation-related fears and the student moratorium subsides. Till then, it is better to be on the sidelines with Sofi stock.

Also Read: SoFi Stock Forecast

SoFi stock forecast 2022: Is SoFi a buy for 2022?

SoFi Technologies is taking every possible step to disrupt the physical banking market and has been successful till now with an ever-increasing user base and revenue. Also, SoFi has an impressive team with the CEO being a former CFO at Twitter and head of global banking at Goldman Sachs and the company has nearly 300 employees from Citigroup and JPMorgan. All seems to be well with the company except the global scenario.

But if an investor is looking at a horizon of five to six years, SoFi can deliver tremendous returns, especially after the recent discounted rate.

SoFi stock forecast 2022

-Vineet Agarwal 

 Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.