Today’s Change
Current Price
SoFi Technologies (SOFI -6.69%), a popular digital financial services platform, closed at $14.22, down 6.69%. The stock reached a 52-week low today, pressured by hotter-than-expected inflation data and pressure on lenders.
Trading volume reached 90.7 million shares, coming in about 108% above its three-month average of 53.6 million shares. SoFi Technologies IPO’d in 2021 and has grown 13% since going public.
How the markets moved today
S&P 500 closed at 7,719, down 1.11%, while the Nasdaq Composite closed at 26,693, down 1.88%. Among fintech stocks, Robinhood Markets (HOOD -8.54%) fell 8.54% to $101.08, and Affirm (AFRM -9.47%) fell 9.74%to $70.51 as rate concerns dragged on the sector.
What this means for investors
Financial stocks came under further pressure today as stubborn inflation reignited fears of higher interest rates, weighing on investor confidence. SoFi shares have fallen almost 50% from last year’s high, and because lending accounts for a significant share of its revenue, investors are concerned it will face further near-term pressure. Watch for its earnings report on Oct. 27 for more details.
SoFi’s membership is expanding, and its revenue is increasing, but there’s caution about how riskier fintechs will fare in a high-rate environment. Analyst sentiment is mixed. Benchmark upgraded SoFi to a “Strong Buy” earlier this week, but Keefe, Bruyette & Woods lowered its price target to $15 and maintained its “Underperform” rating.
For me, what’s particularly interesting about SoFi in the coming decade is its expansion into stablecoins. Most recently, it partnered with Mastercard to deliver settlement in its dollar-pegged coin, SoFiUSD. This emerging market is still evolving, but the benefits of blockchain payments — low costs and fast transactions — could be a game-changer for global payments. Being a stablecoin pioneer could give SoFi the momentum it needs.
Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard. The Motley Fool recommends Robinhood Markets. The Motley Fool has a disclosure policy.
