If this company is a laggard, we could use a lot more of them.
The dictionary tells us that a laggard is a person who makes slow progress and falls behind others.
Related: A veteran analyst correctly predicted SoFi’s stock rally. Here’s what he says now
On Wall Street, the term applies to a stock or security that is underperforming relative to its benchmark or peers.
TheStreet Pro’s Stephen Guilfoyle recently used to the term “laggard” to describe fintech Sofi Technologies (SOFI) , but we’re pretty sure he was just kidding.
Guilfoyle, who is known as Sarge and whose career goes back to the floor of the New York Stock Exchange in the 1980s, told readers that fans of TheStreet Pro’s former “Stocks Under $10” portfolio product “have had a lot to cheer about this year.”
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He noted that the core holding, Rocket Lab USA, (RKLB) has about quadrupled (up 294%) year to date, while Palantir Technologies (PLTR) has more than tripled (up 261%) year to date.
“Rock on,” he said. “Today, I am going to touch on one of our ‘laggards.'”
SoFi Technologies CEO Anthony Noto
Brian Ach/Getty Images for TechCrunch
Veteran trader cites SoFi’s recent results
Guilfoyle said SoFi was “up a mere 54% year to date at least once a month, so this will not come out of the blue, but we do have to do something about our target price. SOFI is actually up 155% since its 2024 low in early August.”
The company last month beat Wall Street’s third-quarter earnings estimate, and Guilfoyle, a longtime SoFi supporter, had said in an earlier column that the company had an “excellent quarter” and offered “muscular guidance.”
Related: SoFi makes a big move its customers may applaud
At the time, Chief Executive Anthony Noto declared that “this quarter was the strongest quarter in our history.”
Financial services generated total revenue of $84.2 million, double the year-earlier figure, while net interest income grew 66% and non-interest income grew 235%.
Lending generated total revenue of $396.2 million, up 14%, while the technology platform generated total revenue of $102.9 million, a 14% increase.
For the full fiscal year, SoFi projected adjusted net revenue of $2.535 billion to $2.55 billion, up from the previous estimated range of $2.43 billion to $2.47 billion.
SoFi is scheduled to post fourth-quarter results in January. Wall Street is currently looking for the company to earn 4 cents per share on revenue of $678 million.
Guilfoyle said he had been experimenting with a new tool called MarketGrader, which found that SoFi grades out fundamentally at an A+ for growth and a B- for value.
“As far as sentiment indicators are concerned, it’s solid grades across the board, an A+ for both relative strength and earnings guidance, an A for price momentum and a B for price trend,” the veteran trader said. “In fact, the stock gets a total sentiment score of 9.1 out of 10.”
“This third-party tool helped me confirm what I have long felt about SOFI: that perhaps this party is still in the early innings,” he added.
Guilfoyle increased his price target for SoFi to $19, which he said is high on Wall Street. The new target is up from $13.50.
The fintech’s shares had surpassed the $10.25 price target that Guilfoyle had reiterated on Oct. 9.
Analyst note SoFi’s ‘impressive’ cut in charge-offs
After SoFi reported its results, Mizuho analysts raised its price target on the shares to $16 from $14 and affirmed an outperform rating on the shares after hosting Chief Financial Officer Chris Lapointe for investor meetings.
The investment firm cited higher market multiples in the sector for the target increase. SoFi has done an “impressive job” reducing net charge-off rates, even excluding the impact of delinquent loan sales, the analysts said in a research note.
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Last month, after the company’s third-quarter report, Barclays raised its price target on SoFi Technologies to $9 from $8 and kept an equal weight, effectively neutral, rating on the shares.
The company beat the estimate of adjusted revenue, driven by fees from the loan-platform business, which more than offset a 7% miss on the estimate of expenses, the investment firm said.
Barclays added that SoFi was leaning more into fee-based revenue from its lending platform, which is a positive.
Jefferies raised the firm’s price target on SoFi to $13 from $12 and maintained a buy rating on the shares.
Third-quarter results beat the Wall Street consensus, driven by higher origination, net interest income, and non-interest revenue from the new loan platform, while fiscal 2024 guidance was raised more than the Q3 beat, the firm said.
SoFi is “well-positioned for a rate-cut environment,” the firm said.
Related: Billionaire Bill Ackman makes big bet on major consumer stock
The San Francisco fintech recently announced the launch of a new robo-adviser platform, expanding on the company’s current automated investment offering.
SoFi’s robo-investing product offers the benefits of always-on automation with expert-curated portfolios for a 0.25% annual adviser fee and enables members to adjust taxable and non-taxable portfolios to their needs.
“Our new robo platform bolsters our commitment to empowering the everyday investor,” Noto said in a statement.
“SoFi Robo Investing marks yet another milestone as we continue to deliver on our mission to build a one-stop financial platform that helps our members unlock their long-term goals in a meaningful way.”
Related: Veteran fund manager sees world of pain coming for stocks
