SoFi stock steadies after analysts come to its defense

May 11, 2022 1:12 PM ETSoFi Technologies, Inc. (SOFI)UPSTBy: Liz Kiesche, SA News Editor23 Comments

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SoFi Technologies (NASDAQ:SOFI) stock has stabilized, rising 0.5% in Wednesday trading after falling 12% on Tuesday, as fears eased that the credit quality hurting Upstart's (UPST) Q1 results would also affect the personal finance app.

Due to the stock price drop, SoFi (SOFI) took the unusual step of releasing its Q1 earnings during Tuesday's trading session. The company also raised its guidance for the year.

Mizuho analyst Dan Dolev said the downturn was unwarranted. He's impressed by SoFi's (SOFI) ramp up in personal loans, major metrics trending up, and strong upside to full-year guidance on both revenue and adjusted EBITDA.

Concern about credit quality is less of an issue with the fintech than others, said Oppenheimer analyst Dominick Gabriele. "SOFI is more fee-driven today and their originated loans are super prime in both student and personal (yes, even personal)," the analyst wrote in a note to clients. "They're learning to underwrite credit cards, yet card is still a very small part of the business. We're less focused on credit for SOFI vs. other lenders."

SA contributor Steven Fiorillo is bullish on SoFi (SOFI), noting that there "seems to be a misconception about what student loan forgiveness means" for the company.

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