SoFi Technologies Inc SOFI is likely to generate strong revenue growth as it gains a share in the consumer financial services wallet, according to Morgan Stanley.
The SoFi Technologies Analyst: Betsy Graseck initiated coverage of SoFi Technologies with an Overweight rating and a price target of $25.
The SoFi Technologies Thesis: Although competition in the fintech space is rising, the company is “leading with lending; specifically refinancing a high yield student loan into a lower rate,” Graseck said in the initiation note.
Lending generates higher customer loyalty and a “lending first model generates customer leads for SoFi's other services,” she wrote.
“We expect SoFi's customer base can double in the next 2 years, from 2.6 to 5.3 million, after more than doubling over the past year from 1.2 million,” the analyst commented.
“Financial Services revenue growth is a key driver of our growth model. We are looking for ~150% CAGR over the next 2 years as SOFI doubles its customer set and expands its product offerings," she added.
SOFI Price Action: Shares of SoFi Technologies had risen by 10.85% to $17.97 at the time of publication Monday.
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