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SoFi Technologies, Inc. (SOFI) Shows Technical Oversold Condition and Promising Growth

StockInvest.us, 1 month ago

SoFi Technical Analysis of SoFi Technologies, Inc. (SOFI)

As of January 19, 2024, SoFi Technologies, Inc.'s (NASDAQ: SOFI) stock closed at $7.49, indicating a slight increase of 1.08% from the previous day. The stock had fluctuated within the day between a low of $7.21 and a high of $7.50. Despite recent gains, the stock is trading below its 50-day moving average of $8.13 and its 200-day moving average of $7.79, which could be interpreted as bearish signals. The Moving Average Convergence Divergence (MACD) stands at -0.13, suggesting negative price momentum over the past three months.

The Relative Strength Index (RSI) stands at a low 16, indicating that the stock may be deeply oversold, and a reversal or bounce might be imminent. This near-bottom RSI can often precede a short-term price correction upwards. SOFI's Average True Range (ATR) is 5.81, hinting at the stock's high volatility in recent times.

With a calculated stop-loss level at approximately $7.06, SOFI appears to have some support at $6.94, but faces resistance at $7.89. The current market capitalization for the company is $7.18 billion on a volume of 39.76 million shares traded, somewhat below the average volume of 44.27 million shares.

Fundamental Analysis of SoFi Technologies, Inc. (SOFI)

From a fundamental perspective, SoFi Technologies drew investors' attention by showing promising growth, having risen by 85% in 2023. The end of student loan forbearance has been a tailwind for the company's earnings. Additionally, the reported growth in memberships by 480,000 and products by 847,000 in the third quarter of last year reflects successful strategies in cross-selling and customer retention—key indicators of sustainable business growth. Prospective investors are keeping an eye on the upcoming earnings announcement on January 29, 2024, poised for further insight into the company's performance.

Despite these encouraging signs, SoFi's current negative earnings per share (EPS) of -$0.45 and a negative PE ratio of -16.64 reflect its struggle to achieve profitability. However, the widespread adoption of AI and digital finance solutions could benefit SoFi, which aligns with technological trends.

SoFi Analyst ratings show a "Buy" consensus, with 6 buys, 4 holds, and 3 sell recommendations. The target consensus price stands at $9.88, with a high target of $22 and a low target of $2.50, suggesting some analysts see significant upside potential, while others remain cautious, possibly due to its unprofitability.

Stock Performance Predictions

For the next trading day on January 22, 2024, SoFi's deeply oversold RSI could hint at a short-term bounce back, potentially making it a stock to watch for a potential rebound. If the stock maintains its support level at $6.94 without breaking through, investors might expect a move towards resistance levels in the short term.

Considering a weekly outlook, the anticipation of the company's earnings report could induce volatility, as investors position themselves based on expectations. Domains related to AI and technological innovation, which are bullish sectors currently, could further piquant investor interest in SoFi. Hence, within the upcoming week, positive sentiment ahead of the earnings announcement may positively influence the stock performance if the broader market conditions are favorable.

Overall Evaluation

Given the technical oversold condition and the underlying fundamental growth narrative, SoFi Technologies, Inc. (SOFI) could be positioned for a 'Hold' with a close watch. The company has demonstrated solid growth metrics in users and product uptakes, indicating strong business operations. However, the persistent lack of profitability and a cautious market sentiment reflected in a mixed bag of analyst recommendations could advise against aggressive buying.

Investors may consider holding SOFI shares in anticipation of a potential short-term technical correction and more substantive gains anchored by upcoming earnings reports. Nonetheless, potential investors might await the earnings announcement for further clarity or consider establishing a small position to capitalize on any positive surprises. Those already holding SOFI should monitor the stock closely around the earnings release to reassess based on the latest financials and management outlook.

Check full SoFi forecast and analysis here.