Shares of the financial technology company SoFi (NASDAQ:SOFI) are under pressure, losing more than 35% of their value year-to-date. While SOFI witnessed a significant pullback, hedge funds capitalized on its low share price and accumulated it.
TipRanks’ Hedge Fund Trading Activity tool (which analyzes data from Form 13-Fs to offer hedge fund signals) shows that these financial experts favor SoFi in the fintech space.
With this background, let’s look at the hedge fund trading activity for SOFI stock.
Hedge Funds Bought 14.2M SoFi Shares
Concerns about SoFi’s loan origination and credit quality have weighed on its share price. Moreover, the company raised capital by issuing convertible senior notes. This has sparked worries about potential capital dilution, adding more pressure on SoFi stock.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bearish on SOFI stock believe that concerns about credit trends could continue to weigh on shares. Nonetheless, hedge funds are optimistic about SOFI stock.
The Hedge Fund Confidence Signal is Very Positive for SOFI stock based on the activity of eight hedge funds. Hedge funds increased their SOFI holdings by 14.2M shares in the last quarter.
Will SoFi Become a Penny Stock?
The continued decline in SoFi stock suggests that it is heading towards penny-stock (learn more about penny stocks here) territory. However, Wall Street analysts’ average price target of $8.61 implies it will reverse course and rise about 34.11% from current levels.
However, Wall Street remains sidelined. SoFi stock has four Buys, nine Holds, and three Sell recommendations for a Hold consensus rating.
Bottom Line
While hedge funds show strong confidence in SoFi, Wall Street analysts remain sidelined. These mixed data points suggest that investors should consider multiple factors when making investments. Investors can leverage TipRanks’ Experts Center tools to gain comprehensive insights on SOFI stock.