Stephens Assigns SoFi Technologies Stock a Buy Rating for its ‘Diversified’ Growth Platform

On Thursday, Stephens initiated coverage of SoFi Technologies (SOFI) stock with a Buy rating, citing its “diversified” growth platform. Stephens analyst Kyle Joseph assigned a price target of $20 to SOFI stock, reflecting 34.2% upside potential. Despite solid financials, the stock of the fintech company and digital bank is down 3.3% year-to-date on fears of an economic slowdown and elevated valuation.

Here’s Why Stephens Is Bullish on SOFI Stock

Joseph, a 4-star analyst, is bullish on specialty finance stocks having “funding advantages and superior customer-acquisition models.” He believes that such companies are the most protected from economic downturns and intense competition.

Aside from SoFi’s diversified business model, Joseph also highlighted the fintech company’s “productivity loop.” He feels that SoFi’s growth prospects continue to be strong. Also, Joseph expects the company’s product mix shift to fee-based revenues to drive multiple expansion.

Following a meeting with CFO Chris Lapointe at William Blair’s 45th Annual Growth Stock Conference, William Blair analyst Andrew Jeffrey reiterated a Buy rating and recommended that investors should build positions in SOFI stock. The 5-star analyst noted SoFi Technologies’ ability to meet consumers’ demand for comprehensive and fair digital finance solutions. He believes that the company’s solid member and product growth, supported by growing fee revenue and steady scale economies, are key valuation drivers.

In contrast to Stephens and William Blair, Bank of America has a Sell rating on SoFi Technologies stock, mainly due to valuation concerns.

Is SOFI Stock a Buy, Sell, or Hold?

Wall Street has a Moderate Buy consensus rating on SoFi Technologies stock based on seven Buys, five Holds, and three Sell recommendations. The average SOFI stock price target of $14.05 indicates a downside risk of 5.7% from current levels.

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