2024 hasn’t been great for SoFi Technologies Inc. (NASDAQ:SOFI) so far, with its stock down over 30% year-to-date and plummeting more than 70% from its all-time high. This downturn has been exacerbated by a substantial short interest, accounting for over 18% of its float.
Recent news and business fundamentals
Despite these setbacks, SoFi has been actively enhancing its business fundamentals and expanding its market presence. The company recently strengthened its lending capabilities through a $350 million personal loan securitization, underscoring efforts to diversify funding sources and support member growth.
Additionally, SoFi has been focusing on bolstering its financial services and tech platform segments, which collectively grew 54% year-over-year in the latest earnings report.
The company’s strategic initiatives include partnerships like the one with the National Association of Realtors, aimed at broadening its customer base and enhancing service offerings in mortgage and personal loans.
Moreover, SoFi’s robust membership growth, reaching over 8.1 million members, reflects positive consumer sentiment and strong traction in its product offerings.
Earnings, analyst views, and valuation
In terms of financial performance, SoFi reported solid first-quarter results, surpassing earnings estimates with adjusted net revenue of $580.6 million and adjusted EBITDA of $144.4 million.
Despite this, the company’s second-quarter guidance fell short of analyst expectations, contributing to a decline in the stock price and causing uncertainty among investors.
Analysts have expressed mixed views on SoFi’s outlook, with some highlighting its strong revenue growth potential and others cautious due to macroeconomic uncertainties and competitive pressures.
Valuation metrics indicate that SoFi’s stock is currently trading at a significant discount relative to its peers in the fintech sector, suggesting a potential value opportunity for long-term investors.
Analyzing SoFi Technologies’ price trajectory
As we assess SoFi Technologies’ stock performance and strategic initiatives, the next crucial step is to analyze its price trajectory through technical analysis. By examining key indicators such as the relative strength index (RSI), volume price trend (VPT), and historical price patterns, we can gain insights into potential price movements and investor sentiment.
Shares of SoFi Technologies saw a massive spike post the company’s IPO in late 2020. But faced resistance near $25. After failing to break above that mark thrice, it entered a prolonged downtrend that lasted for close to two years and saw it crashing below $5.
After a minor retracement that took it near $12, the stock again began a downward trend that has seen it forming a descending triangle pattern on the chart. The descending triangle pattern is a bearish chart pattern indicating that if the stock falls below the base support it can have a massive fall.
Hence, traders who are bearish on the stock can place short trades, but they must wait for it to break below the support at $6.40. If it does they can put a short trade and keep a stop loss at $7.9. If the downward move persists, the stock can crash to $3.6 levels where one can book profits.
Investors who continue to be bullish here have a low-risk trade on their hands currently. They can buy the stock near $6.80 and keep a stop loss at $6.35. If a bounce back materializes from current levels and the stock manages to cross above $7.9, it can again test the $11.7 level, where one can book profits.
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