SoFi Technologies (NASDAQ:SOFI) stock slipped more than 5% in early New York trading on Wednesday.
The move lower came after Keefe, Bruyette & Woods analysts downgraded their rating on SOFI to Underperform (from Market Perform), citing a combination of recent outperformance.
Despite SOFI's +43% surge since reporting 3Q23 earnings, outperforming the KFTX (+30%), analysts adjusted their estimates, leading to a material deviation from consensus figures.
The updated 2024 revenue and EBITDA projections of $2.3 billion and $493 million, respectively, stand approximately -10% and -17% below Street expectations. This variance is attributed to slower origination growth and technology revenues.
Consequently, KBW sets a new price target at $6.50 (down from $7.50), signaling around 33% downside from current levels.
“SOFI's shares remain heavily debated, and ultimately achieving (and sustaining) profitability in 4Q23/2024 could be possible; however, we believe there are more downside scenarios to this outcome than upside, which at a premium valuation shifts us to a more cautious stance,” analysts said in a downgrade note.
SoFi stock fell over 3% on the first trading day of the new year.