SoFi Stock Drops After Bank of America Downgrade: What Investors Need to Know

SoFi Technologies Inc. SOFI saw its stock close 2.81% lower at $15.57 on Monday and continue to slide by 0.5% in premarket trading on Tuesday. The decline followed a downgrade from Bank of America Securities over valuation issues.

Recent Developments

Bank of America downgraded SoFi from “Neutral” to “Underperform,” setting a price target of $12 per share.

Stock Performance and Market Comparison

Despite recent challenges, SoFi shares have risen 61.35% this year, with a remarkable 121.48% increase over the past six months. In comparison, the Nasdaq Composite index gained 33.66% and 14.8% during the same time frames.

BofA commented in their report, “After the rally, we believe valuation is ahead of fundamentals and SoFi is priced to perfection.” They noted that the stock trades at 20 times estimated earnings per share for 2026, higher than its peers. They added, “At this valuation, we view risk-reward less favorably.”

In contrast, Jefferies maintained a “Buy” rating for SoFi on November 26, raising its price target from $13 to $19 per share.

Technical Analysis

From a technical standpoint, daily moving averages indicate significant support for SoFi’s stock. Although it dropped nearly 3% on Monday and further to $15.56 after hours, the stock remains above its 20, 50, and 200-day simple moving averages. Specifically, the 20-day average is $15.06, while the 50-day and 200-day averages are $12.03 and $8.44, respectively.

However, the current share price is beneath its eight-day average of $15.98. The stock’s relative strength index of 68.19 suggests it could be nearing “overbought” territory.

Analyst Consensus

According to Benzinga Pro data, SoFi has an average price target of $10.2 per share based on ratings from 26 analysts. The highest target set by analysts tracked by Benzinga is $22 from Rosenblatt, issued on February 23, 2022, while the lowest target is $3 from Wedbush in April of this year.

The average target of $14.67 from Bank of America, JPMorgan, and Mizuho signals a potential downside of 5.74% for SoFi.

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