SoFi (SOFI) Stock Slips as Mizuho Cuts Price Target by 43%, Goldman Sachs Starts at Neutral on Valuation

Shares of SoFi Technologies (NASDAQ: SOFI) are down over 2% after Mizuho analyst Dan Dolev lowered the price target to $17.00 per share from the prior $30.00.

The lowered price target reflects “the impact of warrant redemptions in December and our medium-term adj. EBITDA expectations.”

When it comes to near-term estimates, they remain unchanged.

“We are lowering our FY22-23 adj. EBITDA estimates from $257mn and $480mn to $178mn and $370. This reflects longer-term expectations from management of achieving an incremental EBITDA margin of 30% by reinvesting about 70 cents of every incremental dollar of revenue back into the business during an average 12-month period,” Dolev said in a client note on the But-rated SoFi.

Moreover, Goldman Sachs analyst Michael Ng initiated research coverage with a Neutral rating and a 12-month target price of $16.00.

“We forecast SOFI to realize a 37% 4-year adjusted revenue CAGR with $1.1 bn of EBITDA by 2025. First, Lending should realize a growing loan book driven by the end of the student loan moratorium, share gains in personal loans, and expansion into mortgage. Second, member and engagement growth should drive Financial Services with increased usage of deposit accounts, investing, and card spending. Third, Technology will benefit from demand for banking-as-a-service and modern card issuing & processing technology and Galileo’s experience and expertise, particularly among fintechs and digital banks customers. A SOFI bank charter could provide upside optionality and has the potential to reduce funding costs and increase net interest income,” Ng said in a client note.

However, the Neutral rating is a result of the current market valuation that largely reflects SOFI’s growth opportunity.

SoFi stock price is already down over 15% YTD.

By Senad Karaahmetovic | [email protected]

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