Sign InSoFi Technologies (SOFI) Shows Potential Upside Amidst Uncertainties
Summary
SoFi Technologies, Inc. (SOFI) closed at $8.71 on June 29, 2023, experiencing a drop of 1.80%, but technical analysis indicates an upward trend, while fundamental analysis suggests potential positive industry changes, leading to a recommendation to Hold the stock.
Technical Analysis
SoFi Technologies, Inc. (SOFI) closed the trading day on June 29, 2023, at $8.71. The stock fell by $0.16 (a 1.80% drop). The intraday high was $9.28, whereas the day's lowest trading price was $8.60. The 52-week low remained at $4.24 and the 52-week high at $10.23. The stock volume for the day stood at 42.17 million, below the average volume of 50.49 million, indicating a less active performance for the day.
The stock's relative strength index (RSI14) stands at 57. An RSI value above 70 often indicates an overbought situation, while under 30 is considered oversold. With an RSI of 57, SOFI is currently within a normal range.
Examining moving averages, the 50-day moving average price is $6.57, while the 200-day moving average is $5.80. Both of these figures stand well below the latest closing price, indicating an upward trend in the stock's performance.
In terms of technical performance, the Moving Average Convergence Divergence (MACD) value for a 3-month period is 1.44, suggesting bullish momentum for the stock.
Fundamental Analysis
SoFi Technologies, Inc. holds a market capitalization of $8.20 billion with 940.90 million shares outstanding. The firm exhibits a negative earnings per share (EPS) of -$0.29 and an unattractive negative price-to-earnings (P/E) ratio of -30.03, reflecting the company's current unprofitability.
The discounted cash flow (DCF) value stands at $10.29, which indicates that the stock might be underestimated at its current price level.
From a fundamental perspective, the upcoming decision by the Supreme Court on President Joe Biden's student loan forgiveness plan could have a significant impact on SOFI's performance. If the decision is in favor, it could positively influence the stock's strength given that SoFi Technologies, Inc. is a prominent player in the student loan arena.
However, a note of caution remains. One news report points out that J.P. Morgan only sees about a $90 billion opportunity for SoFi from student-loan refinancing, out of a potential $200 billion market. Additionally, bearish analysis led to the stock price falling closer to $8 from a 2023 high of nearly $9.75 per share.
Stock Predictions
Analysts' target high for the stock is $22, while the target low is $2.5. The consensus sits at $10.12 with the median target being $8. By observing these targets, it would seem that there is potential for significant upside for the stock.
Concluding Evaluation
Despite the company's current unprofitability and negative EPS, the stock shows an upward trend from a technical standpoint. Macroeconomic events such as the impending Supreme Court decision on student loan forgiveness can affect the short-term performance of the stock.
Given the uncertainties surrounding the stock and considering its above-average DCF value, analyst target expectations, and potential positive industry changes, it would be prudent for investors to Hold SOFI.
While this analysis offers an informative perspective of potential future performance, investors should conduct thorough due diligence and consider their risk tolerance before making any investment decisions.
