Shares of SoFi Technologies, Inc. (NASDAQ:SOFI) are rising Monday after Citizens published a note about the fintech company, upgraded the stock to an outperform and set a $30 price target.
- SoFi Technologies stock is moving in positive territory. What’s driving SOFI shares up?
Citizens Says Ideal Market Conditions For Growth
Citizens analyst Devin Ryan said the recent tech stock sell-off has boosted opportunities for companies involved in blockchain technology, business banking and the loan platform space. He also noted that the stock retracted to around $21 from highs of more than $30 last year, creating opportunity for investors.
SoFi’s fundamentals have been “de-risked” recently, with membership up 35% year-over-year, the company’s ninth consecutive quarter of GAAP profitability and more than $3 billion added in incremental capital since the second half of last year, the analyst said.
Citizens Highlights ‘Three Pillar’ Investment Thesis
A recent report from SoFi said that 40% of new products were opened by existing members. The Citizens analyst said this shows the company’s flywheel is scaling up because of direct-deposit relationships.
The company’s revenue stream diversification is also accelerating, with fee-based revenue comprising half what the company brought in last year. The loan business is also growing, and Citizens believes that SoFi is transitioning from a lender to a platform quickly.
Finally, Ryan’s note highlighted how SoFi became the first nationally chartered bank to launch consumer crypto trading and its own stablecoin on a public blockchain. Ryan said SoFi has a strategic “right to win” in crypto/tokenization with a large customer funnel, a deep understanding of the technology, an ability to integrate across the platform and access to assets, which can be tokenized in areas such as loans or investment assets.
Across the company, AI is seen as a compounding lever, and can be used in the future to accelerate engineering, product launches and optimize customer acquisition, Ryan said in the note.
“In short, we believe the stock has de-rated, while the business has continued to execute and broaden,” the analyst wrote.
SoFi Shares Rise To Start The Week
SOFI Price Action: SoFi shares are up 2.78% at $21.44 at the time of publication on Monday. The stock is trading 34.3% below its 52-week high. Monday’s price has swung between a low of $20.80 and a high of $21.48, with an RSI of 31.5 indicating some weak momentum.
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