Fintech lending platform SoFi (SOFI) has been on a tear lately, up 42% in the past month alone. This massive comeback has pulled the stock into positive territory on a year-to-date basis, with SOFI now up more than 10% in 2024.
The company recently announced a $2 billion loan platform agreement with Fortress Investment Group, enhancing its loan capabilities and diversifying revenue streams. This partnership has been positively received by investors, validating SoFi's underwriting model. Additionally, broader market trends, such as Federal Reserve interest rate cuts, are expected to benefit SoFi's core lending business.
Compared to competitors like LendingClub (LC) and Affirm (AFRM), Sofi's revenue growth and improving margins stand out, suggesting a competitive edge. Expectations of continued revenue growth are further contributing to the stock's rally, with quarterly earnings expected ahead of the opening bell on Oct. 29.
Analysts have rated SOFI stock a tepid “Hold,” and the shares now trade at a premium to Wall Street’s average price target of $8.77.
With the fintech stock looking overbought ahead of next week’s earnings report, based on the 14-day Relative Strength Index (RSI) of 79.24, investors should be cautious about a potential short-term pullback.
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On the date of publication, Edited by Elizabeth Volk did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
