Sticking With This SoFi Price Target as Earnings Could Trigger Profit-Taking
The financial services firm is flashing future upside as Wall Street looks for $682 million in revenue reporting.
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You and I both know it: Friday night awaits. We'll feast. We'll make merry as if the weekend will go on forever. Then, before you can really think about it, the NFL Conference Championship games will end, the depression will set in and as soon as you drift off to sleep, that alarm will go off and it will be zero dark thirty on Monday morning. Coffee, push ups, European markets, U.S. dollar valuations and U.S. equity index futures. In that order.
Oh, one more thing, at least for this coming Monday morning. Sarge name and one of the "Stocks Under $10" portfolio superstars, SoFi Technologies SOFI will report the firm's fourth quarter financial results. Wall Street is currently looking for a GAAP EPS of $0.04, flats from the year-ago period, on revenue of roughly $682 million. That would be up about 15% on a year-over-year basis.
Readers should keep in mind that three months ago, management projected full-year revenue generation of $2.535 billion to $2.55 billion, which was up from the full-year guidance given three months prior to that and implied annual revenue growth of 22% to 23%, up from the 17% to 19% growth previously expected. Guidance was also boosted for full-year adjusted EBITDA, full-year GAAP net income and full-year GAAP EPS.
SOFI Shares Swooned
Readers may recall that SOFI shares swooned in late December into early January. On December 27, I warned readers here that a bearish technical pattern had developed. The share price would fall 15% over the next week or so. On January 3, I informed readers that I had been adding to my long position in SOFI on January 2 when the stock plummeted 8.25% in one session due to a downgrade by a sell side analyst (Tim Switzer of KBW) with a long track record of being wrong on this stock. I did put the word out that I was buying that dip in real time on Twitter (or X), but for this website, I was unable to inform my crew until the next morning.
Remember...
...that this is a name of high conviction for us on a long-term basis, as long as Anthony Noto, who buys the stock with his own cash on a regular basis, remains CEO. If you read me, you know I invest in CEOs and Noto, in my opinion, is a good one.
What Do You See?
A rising-wedge pattern, which is a pattern of bearish reversal, but this one appears to be nowhere near closing. That suggests further upside for now.
A smaller falling-wedge which is a pattern of bullish reversal that appears to have closed and launched the current rally. Or is that a nearly two-month long bull flag (two months is way too long for a flag), that also could claim to have launched the current rally?
Maybe we're looking at a stock that fits rather neatly into an Andrews' pitchfork model going back to August that also implies further upside.
Regardless, to me, all of these set-ups imply either short-term or trend continuance upside. Should the stock report numbers that leads the market to take profits, if the story is intact, I will still be a buyer and still see this stock as part of the portfolio I intend to eventually leave my descendants.
My target price for this name has been $20 since mid-December. Currently, the upper trendline of the Pitchfork is running at close to $19.
That moving target is my pivot. My pivot had been the apex of that flagpole. The higher pivot takes my target price higher, to $23. My add level remains down to the 50-day SMA, while my panic point remains the 200-day SMA. That line is still below $10. Hence, I'm not panicking anytime soon.
At the time of publication, Guilfoyle was long SOFI equity.
