© Reuters. SoFi (SOFI) Stock Gains 6% After Piper Sandler Upgrades to Overweight
Piper Sandler analyst Kevin Barker upgraded SoFi Technologies (NASDAQ: ) to Overweight from Neutral, with a price target of $10.00 per share (down from $12.00).
The analyst noted that SOFI stock has sold off sharply over the past six months due to extended student loan moratoriums, rising interest rates, and a sharp sell-off in growth stocks.
“We acknowledge that there will be some headwinds due to rising interest rates, but the market is discounting SOFI too much and the company is poised to show significant EBITDA growth in 2H22 and 2023. Rapid deposit growth, maturing student loan moratorium and financial services sector Revenue growth in 2023 and 2024 should deliver significant earnings momentum in 2023 and 2024,” Barker said in a client note.
Barker expects that the eventual expiration of the moratorium could result in SOFI adding an additional $20 million to $30 million in EBITDA per quarter.
The analyst also believes that the market may begin to appreciate SoFi more in the second half of the year, which should also lead to a higher price-to-earnings ratio for the stock.
SOFI shares rose nearly 7.5% in premarket trading on Monday.