Скачать или смотреть SoFi Is Laying Off Employees! Analysts Think Sofi Will Miss On Their Q4 Earnings Report!

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SoFi Technologies (NASDAQ: SOFI) experienced a transition from last month's Santa Claus rally to a New Year's sell-off, echoing the broader market trends. The decline in SOFI stock, however, is not solely attributed to the market's direction; it has been further compounded by an analyst downgrade. Despite the recent focus on the bearish outlook for SoFi, it would be premature to assume dismal returns for 2024.

An imminent event on the horizon could potentially rekindle optimism surrounding the stock in the near term. Looking ahead over the coming quarters and a multi-year timeframe, there remains robust potential for SOFI shares to revisit their high-water mark, surpassing current prices by more than threefold. Let's delve into the reasons why it might not be the right time to abandon SoFi.

As discussed by InvestorPlace's Thomas Niel, SoFi's December rally was primarily fueled by optimism regarding potential 2024 interest rate cuts by the Federal Reserve, with company-related news playing a minimal role. However, a noteworthy contributor to the recent stock sell-off has been a sell-side downgrade from KBW's Mike Perito, issued on January 3. This downgrade, from "market perform" to "underperform," accompanied by a reduction in the price target from $7.50 to $6.50 per share, led to a 13.9% drop in SOFI shares.

Perito's downgrade is rooted in two main reasons. Firstly, he believes that SoFi's surge since its last earnings report in October was excessive. Secondly, he posits that interest rate cuts might pose as much of a headwind for the neobank as they do a tailwind, particularly in the way SoFi packages and sells loans.

Despite the market's response to Perito's bearish case, those with a more optimistic outlook on SoFi's future could find validation in the upcoming events.

The focal point in the immediate future is the release of SoFi's Q4/full year 2023 results on January 29, post-market. Despite Perito's bearish stance, there has been a rise in sell-side expectations due to upward revisions in earnings forecasts. If SoFi manages to unveil positive GAAP earnings for the first quarter of Q4 2023, it could trigger another post-earnings rally, similar to the surge observed after the October 30 earnings release.

With the lifting of the student loan moratorium and SoFi's expansion beyond student lending, the company is poised to potentially report its first profitable quarter. This positive development could be a catalyst for SOFI stock.

While acknowledging the pre/post-earnings trade potential, the growth narrative extends beyond a short-term play. Throughout 2024, organic growth, driven by increased membership and cross-selling financial services, may counter the perceived "rate cut headwind" cited by Perito and other skeptics.

Looking further ahead, SoFi could exhibit above-average revenue growth and substantial earnings growth, given the fixed-cost nature of its business. Long-term earnings forecasts suggest potential earnings of 23 cents per share in 2025 and 38 cents per share by 2026. Positive indications that SoFi is on track to meet or exceed these forecasts could propel shares to levels not seen since 2021, reaching $15, $20, or even surpassing $25 per share.

In conclusion, if you maintain a bullish stance on this emerging fintech, the recent weakness in SOFI stock might present a buying opportunity. With a B rating in Portfolio Grader, SoFi's trajectory in 2024 and beyond warrants careful consideration for investors with a long-term perspective.

Sources: https://www.crowdfundinsider.com/2024...

https://investorplace.com/market360/2...

https://seekingalpha.com/news/4053834...

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Edited with Gling AI: https://bit.ly/46bGeYv

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