SoFi (NASDAQ:SOFI), a mobile-first online personal finance company, gained 2.1% in premarket trading overnight. The company has also held onto those gains going into this morning's trading session, and added more with today besides. The recommendations of the financial analyst community are giving SoFi extra fuel in its upward trend, with a new voice joining the bullish choir late yesterday.
New Analyst Perspective Gives SoFi a Lift
The latest word from Rosenblatt Securities was particularly helpful to fueling SoFi's latest rise. Rosenblatt, via analyst Sean Horgan, noted that the company is “well-positioned to capture a significant amount of value” as more consumers look away from traditional banking alternatives and instead consider online equivalents.
Horgan noted that “incumbent legacy banks” face significant challenges ahead as more digital alternatives become part of the banking landscape. Easily one of the biggest such advantages Horgan cited was cost-related; online-only banks require no large-scale plants, no expansive buildings on pricey downtown real estate. Horgan goes so far as to note that the cost advantages enjoyed by online-only banks will “...lead to dramatic disintermediation over the next 5-10 years.” Such disintermediation, meanwhile, will lead to plenty of displaced account holders looking for places to deposit their money accordingly.
While Horgan looks for online operations to engage in consolidation over the next few years—as a maturing marketplace would—it's currently an open field and a great opportunity for online banks to seize market share. SoFi is currently in one of the best positions to do just that. Horgan also points out that the rise of mobile payments platforms like Venmo, particularly among younger users, have prompted the move to online banking operations.
With the online marketplace also growing substantially beyond its original applications of buying merchandise—including tools like stock investments or cryptocurrency purchases—having a means to readily address payments online is becoming increasingly vital to everyday life. Horgan noted that uses for such systems range from the esoteric, like cryptocurrency purchases, to the mundane, like paying a friend for last week's drinks or this month's share of the rent.
SoFi specifically has been working to cement its own position in the vanguard of challenger banks. Recently, it hired former Google executive, and banker, Derek White to take over the CEO slot of Galileo, which SoFi purchased back in 2020 for $1.2 billion. Galileo provides banking technology ranging from payments systems to backbone operations via application programming interfaces (APIs) to a laundry list of major names in the online banking sector, including Chime and Robinhood.
How Do Other Financial Analysts Regard the SoFi Stock Price Forecast?
While there has been little said about SoFi—the SoFi stock IPO only kicked off June 1—that which has been said so far has been overwhelmingly positive, based on our latest research of the financial analyst pool. In fact, the company currently carries a consensus rating of “buy” that has been in place since its IPO of two weeks ago.
Rosenblatt Securities joined the party with a “buy” rating yesterday, as noted previously, and before that, Oppenheimer had an “outperform” rating on the company.
As for price targets, the duo have a very narrow range. Only $5 separates the two, with Oppenheimer having a price target of $25 on the company, while Rosenblatt Securities stands at $30, yielding a consensus price target of $27.50. Given that the SoFi stock price today is currently $21.94 as of this writing, there is still substantial upside potential connected with SoFi stock.
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