A significant driver of top-line growth: SoFi Technologies Inc. (SOFI)

SoFi Technologies Inc. (NASDAQ: SOFI) stock fell -1.36% on Tuesday to $5.79 against a previous-day closing price of $5.87. With 32.2 million shares changed hands, the volume of the stock remained lighter than its average volume of 43.45 million shares. During the session, the Credit Services company that operates in wider Financial sector, reached to the highest price of $6.00 whereas the lowest price it dropped to was $5.74. The 52-week range on SOFI shows that it touched its highest point at $13.86 and its lowest point at $4.24 during that stretch. It currently has a 1-year price target of $7.33.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SOFI was up-trending over the past week, with a rise of 2.66%, but this was up by 24.78% over a month. Three-month performance surged to 12.43% while six-month performance fell -10.37%. The stock lost -58.32% in the past year, while it has gained 25.60% so far this year. A look at the trailing 12-month EPS for SOFI yields -0.58 with Next year EPS estimates of -0.26. For the next quarter, that number is -0.09. This implies an EPS growth rate of -149.50% for this year and 39.50% for next year.

Float and Shares Shorts:

At present, 916.76 million SOFI shares are outstanding with a float of 870.77 million shares on hand for trading. On Oct 13, 2022, short shares totaled 96.7 million, which was 10.48% higher than short shares on Sep 14, 2022. In addition to Mr. George Thompson Hutton as the firm’s Independent Non Exec. Chairman, Mr. Anthony J. Noto serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 33.38% of SOFI’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 21.17% of SOFI, in contrast to 16.25% held by mutual funds. Shares owned by individuals account for 13.25%. As the largest shareholder in SOFI with 7.10% of the stake, The Vanguard Group, Inc. holds 65,900,584 shares worth 65,900,584. A second-largest stockholder of SOFI, BlackRock Fund Advisors, holds 28,931,495 shares, controlling over 3.12% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in SOFI, holding 11,735,611 shares or 1.26% stake. With a 2.42% stake in SOFI, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 22,472,273 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.06% of SOFI stock, is the second-largest Mutual Fund holder. It holds 19,127,846 shares valued at 88.18 million. Vanguard Extended Market Index Fu holds 1.21% of the stake in SOFI, owning 11,204,676 shares worth 51.65 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SOFI since 16 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SOFI analysts setting a high price target of $10.00 and a low target of $5.00, the average target price over the next 12 months is $7.21. Based on these targets, SOFI could surge 72.71% to reach the target high and fall by -13.64% to reach the target low. Reaching the average price target will result in a growth of 24.53% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SOFI will report FY 2022 earnings on 02/27/2024. Analysts have provided yearly estimates in a range of -$0.40 being high and -$0.46 being low. For SOFI, this leads to a yearly average estimate of -$0.43. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. SoFi Technologies Inc. surprised analysts by $0.02 when it reported -$0.09 EPS against a consensus estimate of -$0.11. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is -$0.08 and the low estimate is -$0.10. The average estimate for the next quarter is thus -$0.09.

Summary of Insider Activity:

Insiders traded SOFI stock several times over the past three months with 17 Buys and 12 Sells. In these transactions, 3,053,475 shares were bought while 664,675 shares were sold. The number of buy transactions has increased to 91 while that of sell transactions has risen to 59 over the past year. The total number of shares bought during that period was 7,852,713 while 14,721,146 shares were sold.

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