Ahead of SoFi Technologies Inc.'s
Tatevosian, who said he had been "bullish on SoFi stock for a long time," now views the company as "slightly overvalued" and not an attractive buy ahead of earnings, citing elevated volatility and limited upside relative to risk.
According to his proprietary models, "SoFi stock is worth about $20 a share, $19.60 to be precise," he said. At current levels, the stock is "not extremely overvalued," but still "slightly overvalued when accounting for a margin of safety."
Tatevosian said this despite acknowledging the strong operating performances in recent quarters, with the company adding 905,000 new members during the third quarter, originating $3.4 billion in loans for third parties on its platform, while charge-off rates for personal loans declined to their lowest level in more than two years.
Still, he said buying ahead of earnings is not attractive. "I would not be interested in buying SoFi stock before earnings," he said, noting that fourth-quarter reports typically bring added volatility due to forward guidance. "So, you're taking a lot more risk in a situation that doesn't look very attractive."
He concluded by saying that he was maintaining a "Hold" rating on the stock ahead of its fourth-quarter earnings results on Friday.
Stock Up Ahead of Earnings
SoFi currently trades at a valuation of 41.67 times forward earnings, which is broadly in line with peers such as Robinhood Markets Inc.
Other leading analysts are split on the company, with Barclays recently raising its Price Target on the stock from $23 to $28, representing an upside of 13.31%, while Goldman Sachs analysts reduced their target from $27 to $24, signaling a 2.87% downside.
