Recently, SoFi CEO Anthony Noto purchased 1.1 million company shares for a total purchase price of $5 million. Seeing as the stock sits at its lowest point since going public, investors are wondering if he knows something we don’t – or if this is merely a desperate attempt to turn things around.
One thing we do know is that this move caused a momentary jump in the SoFi share price of about 10% last week. However, this gain quickly diminished and the stock now sits just about even over the last week.
Like many companies over the last year, SoFi has struggled tremendously with the current economic headwinds. However, they’ve felt the effects of this more than others as one of the company’s most profitable lines of business has been put on pause by President Biden: student loan payments. Moreover, lawmakers are urging officials to take a deeper look at SoFi’s crypto trading activities – threatening to suck them into an expensive defense suit.
As the stock sits almost 70% lower year over year, it could be that SoFi CEO Anthony Noto truly believes in the plan to turn things around within the company. This could be his way of sending signals of confidence to investors and potential investors. Or, maybe he’s grasping at straws and hoping this will buy him a bit more time at the helm.
Either way, you may be wondering if the low price point of $4.54 is a good value to buy in the event SoFi does turn things around heading into 2023. Unfortunately, the VectorVest stock analysis tool isn’t giving much to be optimistic about. We see three major problems with the stock ourselves. Keep reading to see what those are…
While SoFi Has Fair Upside Potential, the Safety & Timing are Poor
VectorVest helps you simplify trading by giving you all the information you need to make an informed, calculated decision in just three ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
Interpreting these ratings is as straightforward as it gets because they sit on a scale of 0.00-2.00 – with 1.00 being the average. By picking stocks with above-average ratings you set yourself up for success. OR, to make things even easier, simply follow the buy, sell, or hold recommendation VectorVest offers for any given stock at any given time. With that said, what’s the current outlook for SOFI?
- Fair Upside Potential: The RV rating takes a look at a stock’s long-term price appreciation potential up to 3 years out, comparing it to AAA corporate bond rates and factoring in risk. And right now, SOFI’s RV rating of 0.93 is fair. Furthermore, the stock is currently slightly undervalued at a share price of $4.54 – the current value is $4.84.
- Poor Safety: An indicator of risk, RS takes into account a company’s financial consistency and predictability, debt-to-equity ratio, and business longevity. As for SOFI, the RS rating of 0.58 is poor.
- Poor Timing: Taking a look at SOFI’s price trend, we can see that the timing is poor – and the RT rating of 0.66 reflects that. This is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year.
All three of these ratings work out to an overall VST rating of 0.72 for SOFI – which is poor. Does that mean it’s officially time to cut losses? Get a clear answer on your next move with our free stock analyzer.
Want These Types of Insights at Your Fingertips so You Can Win More Trades?
Use VectorVest to Analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.
VectorVest advocates buying safe, undervalued stocks, rising in price. As for SOFI, it is undervalued with fair upside potential, but it has poor safety and timing.
Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!