[ad_1]
Text size
SoFi shares were falling in Friday trading.
Justin Sullivan/Getty Images
SoFi Technologies
has been called the future of U.S. banking, and though the stock’s year-to-date performance seems to reflect that accolade, one analyst isn’t so optimistic.
This year, the stock has soared 77%, boosted in large part by news that student-loan payments will resume later this year, giving borrowers a reason to refinance at places such as SoFi. That would be good for the digital bank, which saw student-loan originations slide 47% year over year in its most recent quarter.
Compass Point Research analyst Giuliano Bologna said the resulting outperformance of the stock is “overdone.” Bologna initiated coverage of SoFi (ticker: SOFI) at Sell with a price target of $5 in a Thursday report. Shares slid 3.7% to $8.18 in Friday trading.
“The student loan moratorium was already scheduled to end on June 30 with payments resuming 60 days later,” he wrote. “Recent events are unlikely to have a material impact on that timeline and the recovery refinance origination volumes.”
The analyst added that “slowing growth could become an overhang” for the company over the next few quarters and weigh on profitability. He also mentioned accounting risks, specifically regarding the company’s fair-value treatment for personal and student loans.
He’s not the only one voicing concerns on the stock. Earlier this month, analysts at Piper Sandler, BofA Securities, and
Oppenheimer
lowered their ratings to Neutral, or the equivalent, citing concerns about the company’s valuation.
A majority of analysts have stepped to the sidelines for SoFi, with 53% rating shares at Neutral, 37% at Buy and 11% at Sell, according to FactSet.
Write to Emily Dattilo at emily.dattilo@dowjones.com
[ad_2]
Source link
(This article is generated through the syndicated feed sources, Financetin doesn’t own any part of this article)
