As SoFi Technologies Inc. (NASDAQ:SOFI) prepares to announce its fourth-quarter results, analyst Parkev Tatevosian has expressed cautious sentiment toward the stock, particularly given its current valuation. Despite his previous bullish stance, Tatevosian now describes SoFi as “slightly overvalued,” arguing that the stock is not an appealing buy prior to earnings, due to heightened volatility and a limited upside relative to the associated risks.
Tatevosian’s proprietary analysis suggests that SoFi shares should be valued at approximately $20 each—specifically $19.60. He acknowledges that while the current valuation isn’t significantly inflated, it does represent a marginal overvaluation when factoring in a safety margin. He warns that purchasing shares before earnings could be risky, pointing out that the fourth-quarter reports often introduce additional volatility stemming from future guidance.
Consequently, he has decided to maintain a “Hold” rating on the stock ahead of its earnings report, scheduled for Friday.
Presently, SoFi shares trade at a forward earnings valuation ratio of 41.67, which aligns closely with competitors like Robinhood Markets Inc. (NASDAQ:HOOD), at 43.08. Analysts’ opinions on SoFi vary; Barclays has raised its price target on the stock from $23 to $28, indicating a potential upside of 13.31%. Conversely, Goldman Sachs has reduced its target from $27 to $24, suggesting a possible downside of 2.87%.
On Thursday, SoFi shares experienced a slight decline of 0.98%, closing at $24.36, but have seen a minor increase of 0.57% in after-hours trading. The stock maintains strong ratings for Momentum and Growth, according to Benzinga’s Edge Stock Rankings, reflecting a favorable long-term price trend.
Investors remain watchful as they await further clarity from SoFi’s upcoming earnings announcement.