Down over 31% year to date, SOFI stock could see massive gains ahead even given a realistic case scenario, let alone an optimistic one. SOFI is highly rated among analysts with an average one year price forecast of +47% and an average rating of a Strong Buy. And in our realistic projection, we have rated SOFI a Strong Buy with a 23% one year price projection thanks to their 79% EPS growth forecasts.
| SOFI | |
| Share Price | $ 18.79 |
| Earnings Per Share | $ 0.39 |
| EPS (Forward 1yr) | $ 0.70 |
| Price to Earnings | 48.2 |
| EPS Growth (Projected 1 yr) | 79.5% |
| PEG | 0.6 |
In a pessimistic case, we could see the broader industry headwinds really start to eat away at SOFI’s earnings estimates which would come with analyst downgrades and a hit to their valuation multiple (which currently trades high at a 48 price to earnings). Lets say something like this materializes and their earnings estimates turn out to be 40% higher than actuals; this would certainly bring down the valuation by at least that much, so lets say their PE comes down to the 20-30 range. Even at a 20 PE one year from now, they would still be left with about a 47% earnings growth forecast for the next year assuming they can maintain that level of growth. For arguments sake let’s say investors bake that lower growth in and assume a 30% earnings growth rate for the year after; this extremely bearish case would result in a share price of $15.21 which is a 19% downside. However, we think the optimistic scenario is more likely given they have beat all 4 of their last earnings calls and given the upward trend of the fintech industry in general.
If SOFI can continue beating earnings estimates in the next year, it’s much more likely that we will see an optimistic case play out. In an optimistic scenario, we could see SOFI’s earnings growth exceed 100% year over year. If this were to happen, their current PE of 48 would almost certainly match or exceed that of its recent high of 67. However 67 is pretty high so let’s use 60. With a 60 PE and growth forecasts of 100% that would mean their EPS of $0.39 doubles to $0.78 a share, which then gets multiplied by 60 and results in a share price of $52.26. This would give SOFI a +178% upside over the next year, which far outweighs the 19% downside as forecasted in the pessimistic case.
With industry growth forecasts of 7.2% to 7.6% over the next few years, record levels of membership growth, and such a low PEG at 0.6 we put SOFI Technologies stock as medium risk, high reward and think that investors should not look over this one when it comes to attractive growth stocks.
Topics: SOFI stock 2027 price projection, SOFI technologies stock review and analysis, growth stocks to buy now
