One market expert says "now," when discussing sinking next-generation financial services business SoFi Technologies (NASDAQ: SOFI). This analyst predicts the stock might nearly treble in 12–18 months.
One pundit predicts 90% annual gains. Truist Financial Securities analyst Andrew Jeffrey reiterated his buy rating for SoFi at $14 per share in mid-March. This is a 90% increase from the fintech's $7.38 closing price.
Capitalization is an issue for SoFi and a major factor for its post-earnings share price slump. It raised $750 million in convertible notes in a private issue in March to stabilize its finances.
The notes mature in 2029, however the corporation didn't disclose the interest rate (which may have prompted an investor sell-off).
That hampered SoFi. Just days before the convertible notes issue, the company released fourth-quarter and full-year results with strong growth in key sectors. At the end of 2023, revenue rose 35% and customers rose 44%.
SoFi is cheap and promising. I think the market overreacts to convertible notes. It increases the company's debt or dilutes shareholders. Young companies like SoFi sometimes compromise profitability for growth, which may require fresh finance.
SoFi has great long-term potential. It's establishing its ecosystem like many smart tech companies to attract and engage customers.
The average analyst projection for net income this year and next is positive, suggesting profitability should come soon. I agree with Jeffrey that this stock is a steal.
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