SoFi Technologies Stock Falls Pre-Market After Keefe Bruyette Downgrade: Retail Chatter Shows Optimism

According to the brokerage's analysis, the firm’s valuation has become overstretched across a wide matrix of multiples even if it achieves success in its ambitious long-term targets.

Shares of fintech firm SoFi Technologies Inc (SOFI) fell nearly 2% on Thursday morning after Keefe Bruyette downgraded the stock to ‘Underperform’ from ‘Market Perform’ while raising the price target to $8 from $7.

According to TheFly, Keefe believes that the improving macro environment, lower interest rates, and the company's success in driving better profitability have countered several bear theses. This justifies moving the investment thesis toward a more long-term view of what a mature Sofi would look like, it noted.

According to the brokerage's analysis, the firm’s valuation has become overstretched across a wide matrix of multiples even if it succeeds in its ambitious long-term targets.

With Keefe’s downgrade of the stock, retail sentiment on Stocktwits flipped into the ‘extremely bearish’ territory (23/100) from ‘bullish’ a day ago.

Interestingly, retail chatter on Stocktwits also indicated optimism on the stock’s potential.

In mid-December, SoFi had announced that it now serves over 10 million members across its suite of products and services, with total members increasing by approximately 2.5 million year-to-date in 2024.

The company also highlighted that through Sept. 30, 2024, its 10 million members have collectively earned 12.5 billion rewards points, paid down $33 billion in credit card debt, and earned more than $1 billion in interest on savings.

The members also borrowed $117 billion, including $44 billion in refinanced student loans and $9 billion in funded home loans.

Around the same time, Morgan Stanley raised its price target to $13 from $7.50 while keeping an ‘Underweight’ rating on the shares.

SoFi Tech shares have had a good run in the last year, having gained over 59% during the period.

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