BTIG analyst Vincent Caintic has maintained their neutral stance on SOFI stock, giving a Hold rating on August 1.
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Vincent Caintic’s rating is based on several factors surrounding SoFi’s recent financial activities and market positioning. The company recently raised $1.75 billion through a secondary offering, which increased its share count by 7.4% and enhanced its tangible book value per share by 24%. This move was unexpected given SoFi’s previous statements about its comfortable capital levels, which were well above the minimum requirements.
Despite the equity raise, there are concerns about SoFi’s internal capital targets, particularly its CET1 ratio, which might be higher than typical banks due to its fair value accounting methodology. This approach is more susceptible to market volatility compared to traditional credit reserving methods. Additionally, while SoFi’s shares are trading at a price-to-book value that aligns with its targeted return on equity, the company needs to demonstrate sustained earnings growth to justify a higher valuation in the future.
In another report released on August 1, Redburn Atlantic also initiated coverage with a Hold rating on the stock with a $20.50 price target.
Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SOFI in relation to earlier this year.