SoFi Tech Downgraded Over Valuation Concerns: Stock Priced Three Times Its Peers
SoFi Technologies (NASDAQ:SOFI) has faced recent downgrades from analysts citing concerns over the company’s high valuation. However, technical analysis, particularly moving averages, suggests potential support for the stock.
What Happened: SoFi was downgraded to ‘underperform’ by Keefe, Bruyette, and Woods (KBW), despite a recent rally driven by investor optimism and lower interest rates. While KBW slightly increased its price target, it expressed concerns about SOFI’s lofty valuation, deeming its long-term earnings potential insufficient to justify the current stock price.
The brokerage emphasized the challenges of achieving ambitious earnings targets, citing the need for significant revenue growth and margin improvement. KBW concluded that the current risk-reward profile for SOFI investors leans heavily toward potential losses.
According to Benzinga Pro, the stock was nearly three times more expensive than its peers. The forward price-to-earnings for SoFi was 76.923, whereas the average of its peers stood at 26.384.
| Stocks | Market Cap | Forward P/E |
| American Express (NYSE: AXP) | 209.453B | 19.531 |
| Capital One Financial … |
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