SoFi Technologies (SOFI) stock rose about 1% in Monday’s pre-market trading after gaining 1.4% on Thursday following the company’s business banking launch. Last week, the fintech company rolled out SoFi Big Business Banking, a new offering that will help enterprises manage both fiat and crypto banking from a single bank. Keefe, Bruyette & Woods (KBW) reacted positively to the launch but retained a Sell rating on the stock. Meanwhile, on Monday, a Barclays analyst reaffirmed a Hold rating on SOFI stock and reduced his price target as part of his Q1 earnings preview of the Consumer Finance sector.
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Despite strong fundamentals, SoFi stock has declined 39% year-to-date amid growing competition, macro uncertainty, and valuation concerns. Recently, short seller Muddy Waters accused the company of using misleading accounting practices.
KBW, Barclays Weigh in on SOFI Stock
KBW analyst Tim Switzer reiterated a Sell rating on SOFI stock with a price target of $20 following the launch of SoFi Big Business Banking. The 4-star analyst contended that the news is not surprising, as the company had discussed the launch of Big Business Banking for several months. That said, Switzer is “impressed” with the initial list of participants, including prominent crypto companies and payments giant Mastercard (MA).
The analyst believes that SoFi is in a “unique position to connect infrastructure across traditional finance and digital assets as one of the first movers into the space among federally regulated banks.”
Meanwhile, Barclays analyst Terry Ma reaffirmed a Hold rating on SOFI stock, but lowered his price target to $18 from $28 as part of his preview on the consumer finance group ahead of Q1 earnings. The analyst noted that sector valuations have pulled back to below historical averages due to macroeconomic uncertainty. Ma finds risk/reward favorable for stocks rated Buy in his coverage, but remains sidelined on SOFI stock.
While the company continues to deliver market-beating results and grow its member base, several analysts remain cautious on SOFI stock, citing valuation. It is currently trading at a forward P/E multiple (based on adjusted EPS) of 26.8x, way above the sector average of 10.0x.
Is SOFI a Good Stock to Buy?
Overall, Wall Street has a Hold consensus rating on SoFi Technologies stock based on eight Holds, five Buys, and three Sell recommendations. The average SOFI stock price target of $24.19 indicates about 53% upside potential.
