New SoFi Price Target Will Surge Past All-Time High
Digital financial services platform SoFi climbed 5.5% after reporting strong earnings.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Shares of SoFi Technologies (SOFI) shot higher by 5.5% to reach an all-time high on Tuesday after the company reported solid earnings and revenue for its third quarter.
The San Francisco-based digital financial services provider crushed estimates by earning 11 cents per share in the quarter, versus estimates of 8.3 cents per share. Revenues came in just shy of $950 million, well above the projected figure of $889 million.
While SoFi isn’t a member of the S&P 500, its market capitalization of $36.7 billion places it well above the threshold for inclusion in the large-cap index. The current minimum requirement is just $22.7 billion.
SoFi Technologies has put up some staggering numbers. Year-to-date, this stock has gained over 124%. Over the past 12 months, Sofi has climbed by over 183%
SoFi shares have nearly quadrupled since we first recommended this stock last year.
SoFi’s Latest Breakout
It’s not unusual for a stock to consolidate after racking up large gains, and SoFi is no exception. Over the past month SoFi formed a symmetrical triangle pattern (green lines).
In response to its earnings report, SoFi broke out of that pattern to reach its new all-time high. This formation has a tendency to resolve in the direction of the prior trend, and that’s exactly what happened here.
Tuesday’s breakout occurred on the highest volume for this stock in three months (arrow). Based on the size of the pattern, shares of SoFi should reach $36.
Bearish Candlestick Pattern? Not So Fast...
We should note that SoFi shares formed a hanging man pattern on Tuesday (circled). While nearly every technical analysis text refers to this candlestick pattern as bearish, I’ve always disagreed with that assessment.
A hanging man pattern consists of a small body on top of a long wick. That long wick tells me that bears were able to push SoFi as low as $28.80 on Tuesday.
Then the bears were routed by the bulls, as the stock soared to close at $31.67.
How that set of circumstances could be considered anything other than bullish is beyond me. Conventional wisdom disagrees, so I guess we'll have to agree to disagree.
The Bottom Line
SoFi remains a strong stock within a strong market. On its earnings call, the company raised its full-year guidance, featuring upward revisions to earnings, revenue and new customers. That fact, along with SoFi's bullish chart, indicate that the stock may be able to continue on its bullish trajectory.
At the time of publication, Ponsi was long SOFI.
