Sign InSoFi (NASDAQ: SOFI) Shows Potential for Growth Despite Recent Price Drop
Summary
As of July 6, 2023, SoFi Technologies, Inc. (NASDAQ: SOFI) has experienced a 3.34% decrease in its closing price, but projections suggest it is a good time to buy the stock due to its upward trending long-term indicators and potential for future growth in the student loan refinancing sector, although investors should monitor the upcoming Q2 financial results and market conditions for increased volatility.
Overview and Price Performance
SoFi Technologies, Inc. (NASDAQ: SOFI) saw a closing price of $8.10 on July 6, 2023, a decrease of $0.28, representing a 3.34% change. This put the stock well within the daily low and high of $7.855 and $8.26 respectively. Looking at the yearly performance, SOFI has recorded a low price of $4.24 and a high of $10.23 over the last year.
Finding itself on the NASDAQ exchange, the company has a market capitalization of $7.71 billion, with a considerable number of shares outstanding at 940.90 million. The volume of shares traded for the day was 8.42 million, significantly lower than the average volume of 52.27 million.
Technical Analysis
From a technical standpoint, SOFI carries a Relative Strength Index (RSI 14) of 26, indicating an oversold condition. Its 50-day moving average is $6.81, whilst its 200-day moving average is $5.86, suggesting the stock has been generally upward trending over the longer term. The 3-month Moving Average Convergence Divergence (MACD) sits at 0.95, hinting bullish moves in the recent past.
Fundamental Analysis
On the fundamental side, SOFI has reported an Earnings Per Share (EPS) of -$0.28, which translates to a negatively valued price-to-earnings ratio of -29.27. Given the negative earnings, it implies the firm has yet to achieve profitable operations.
Expected Performance and Target Estimates
The discounted cash flow (DCF) analysis, a method valuing the intrinsic value of the company, puts SOFI's value at $9.77. The price is consequently forecasted to rise to this intrinsic value given rational market behavior and accurate estimations. Furthermore, the target consensus puts the stock price at $10.12, with target high and low estimates of $22 and $2.50 respectively.
Relevant News
Relevant recent news shows that SOFI stock climbed by 20.2% in June 2023. The increase was partly due to the end of the federal student loan repayment moratorium and the Supreme Court striking down President Biden's student loan forgiveness plan. As SoFi's business benefits from resumed student loan refinancing, this positions the company for possible future growth.
On July 31, 2023, SoFi is scheduled to release its Q2 financial results, which might contain important financial indicators that could swing the stock price.
Final Evaluation
Based on the information, SOFI seems to be a Buy. Despite its recent price drop, the projected intrinsic value from the DCF analysis, alongside bullish long-term technical indicators, provide strong reasons to anticipate potential increase in price. The essential factor that further supports this decision includes the continued growth and development in its business model, particularly in the student loan refinancing sector. Potential investors are anticipated to closely watch the company's Q2 earnings report as it would significantly affect the stock's future performance. However, they need to continually monitor the given financial market conditions as stocks could be subjected to increased volatility.
