Shares of SoFi (NASDAQ:SOFI) stock are in the red after Mizuho analyst Dan Dolev, a prominent bull of the company, lowered his price target to $12 from $15 while maintaining his “buy” rating. In late December, Dolev mentioned SOFI as one of his top five stock picks for 2024.
“Our analysis of SOFI’s balance sheet shows ample capacity to originate personal & student loans for 5-6 quarters, even without selling loans,” said Dolev back in October. Dolev also estimated that the company will be able to add between $750 and $800 million of incremental lending capacity for each $100 million of GAAP net income it generates.
On Tipranks, Dolev is ranked #5,458 out of 8,680 Wall Street analysts. He carries a success rate of 51% and an average one-year return of 0%.
The valuation of SoFi has remained a problem for the company, as many argue that the stock should be valued as a bank. Banks have historically commanded low valuation multiples, although the counterargument is that SoFi is growing at a much higher pace than traditional banks.
SoFi has an average price target of $9.31 among 18 analysts with coverage of the stock. The price target implies an upside of about 26% from current prices.
SOFI Stock: Mizuho Cuts Price Target to $12
At least three other financial firms have adjusted their SOFI stock price target this year. That includes Barclays, who raised the target to $10 from $8 while maintaining an “equal weight” rating. Furthermore, Deutsche Bank initiated coverage of the stock with a “hold” rating and a target of $11, while Keefe, Bruyette & Woods downgraded shares to “underperform” from “market perform” and lowered its target to $6.50 from $7.50.
So, are the bulls or bears right? Shareholders of SOFI will receive more information once the company reports its fourth-quarter earnings on Monday, Jan. 29, before the market opens.
For the quarter, analysts are expecting $572 million in revenue, signaling yearly growth of 28.93%. Furthermore, the company is expected to break even with a GAAP EPS of zero cents, its highest quarterly EPS ever. GAAP EPS is expected to become positive during the second quarter of 2024 and remain there.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
