SoFi Technologies: Keefe, Bruyette & Woods Maintains Underperform, Raises PT to $18.

SoFi Technologies: Keefe, Bruyette & Woods Maintains Underperform, Raises PT to $18.

Keefe, Bruyette & Woods (KBW) has maintained an Underperform rating on SoFi Technologies Inc. (NASDAQ: SOFI) while raising its price target to $18 from $16. The analyst firm cited concerns about the fintech company's valuation and the potential impact of a recession on its stock price. Despite the downgrade, KBW noted that SoFi's expansion into new financial services and its strategic partnerships, such as the recent collaboration with Lightspark for international money transfers, could drive future growth.

SoFi's recent performance has been mixed. The company reported a share price increase of 149.8% from six months ago, outpacing the S&P 500 and the Nasdaq. However, the stock's performance has been lackluster since its IPO in 2021. The company's revenue has more than doubled in the past four years, but it has also seen an increase in operating costs, particularly in sales and marketing expenses. Nevertheless, SoFi's focus on technology improvements and member-generating marketing spending has driven its revenue growth and improved its earnings per share (EPS).

Looking ahead, SoFi plans to expand its financial services, obtain a national banking charter, and improve customer retention through cross-selling. These strategies aim to increase revenue and profitability as the company grows. However, KBW remains cautious about SoFi's valuation and the potential impact of a recession on its stock price.