SoFi Stock Slides 35% This Year — Is It Time to Buy the Dip?

SoFi Technologies SOFI +1.48% ▲ stock remains under pressure, trading lower in premarket on Tuesday and down about 35% year-to-date. The decline follows a short-seller report from Muddy Waters that raised concerns about the company’s business and accounting.

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At the same time, CEO Anthony Noto bought nearly $500,000 worth of shares after the drop, signaling confidence. However, Wall Street remains cautious. SOFI stock carries a Hold consensus rating, even though the average price target of about $25 implies roughly 50% upside from current levels. This suggests that while the upside looks attractive, risks around valuation and recent concerns are keeping analysts on the sidelines.

Bull Case: Insider Confidence and Investor Support

SoFi’s management has shown confidence at current levels, with CEO Anthony Noto stepping in and buying shares after the recent selloff.

Beyond that, broader insider activity has remained positive. Over the past three months, insiders have bought shares worth about $1.2 million, according to TipRanks’ Insider Trading Activity Tool. This steady buying suggests that those closest to the company remain confident in its long-term outlook.

More importantly, retail investor sentiment also remains supportive. TipRanks data shows that about 2.9% of portfolios hold SOFI, with an average allocation of 5.59%. Holdings have increased by 0.2% over the past seven days and 3.1% over the last 30 days. Overall, investor sentiment is marked as “Positive,” indicating continued support despite recent volatility.

Bear Case: Valuation Concerns and Accounting Questions

On the other hand, the bearish case is driven by concerns raised after the short-seller report. Muddy Waters questioned SoFi’s business model and accounting practices, which has created uncertainty among investors.

Wall Street analysts have also taken a cautious stance. Wells Fargo analyst Donald Fandetti initiated coverage with a Hold rating and a $19 price target. While the firm acknowledged SoFi’s strong growth, it pointed to high valuation and risks tied to loan sales as key concerns.

At the same time, KBW analyst Tim Switzer maintained a Sell rating with a $20 price target. The analyst said the short-seller report highlighted detailed issues related to SoFi’s accounting and disclosures, including information from filings and loan sale records. These points have raised new questions about the company’s financial reporting.

Overall, while SoFi has denied the claims and called the report misleading, these concerns could continue to weigh on investor sentiment in the near term.

Is SOFI Stock a Good Buy?

Wall Street has a Hold consensus rating on SoFi Technologies stock based on five Buys, eight Holds, and three Sell recommendations. The average SOFI stock price target of $25.42 indicates 50% upside potential.

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