In a report released yesterday, Moshe Orenbuch from TD Cowen maintained a Hold rating on SoFi Technologies, with a price target of $22.00.
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Moshe Orenbuch has given his Hold rating due to a combination of factors surrounding SoFi Technologies’ recent performance and future outlook. The company has shown strong momentum in its Loan Platform Business (LPB), with significant growth in origination and partnerships with firms like Fortress and Edge Focus. Despite this positive trajectory, the pace of growth is expected to moderate, and the recent $1.5 billion capital raise, while not materially impacting EPS, is anticipated to dilute return on equity by approximately 110 basis points by 2027.
Additionally, while the financial services segment has outperformed expectations with higher total products and average revenue per user, the lending segment presented mixed results. Lending net interest income fell short of estimates due to a decline in loan yield, although this was somewhat offset by better non-interest income. The overall lending origination volume has increased, but the mixed performance in this segment contributes to the cautious Hold rating, as the company navigates these challenges and opportunities.