Why did SoFi shares jump 13% yesterday?

Is there an investment opportunity with SoFi (NASDAQ: SOFI)? Well, one Morgan Stanley analyst seems to think so after initiating coverage and setting a $25 price target on the stock yesterday. SoFi Technologies ended the day up over 13% yesterday on the news, hitting a high of $18.51. The price target represents a 50% upside from Friday’s closing price of $16.21, and a 35% upside from Monday’s close at $18.39.

Morgan Stanley follows others such as Oppenheimer, Jeffries, and Credit Suisse in initiating coverage for SoFi in recent months, with a total of six analysts now covering the firm since it went public via SPAC on June 1. This coverage highlights the impact that the company is having on Wall Street as more and more experts take notice.

So what does SoFi do..?

SoFi is a digital bank offering a suite of financial services to its user base, with a model built on cross-selling products to customers. SoFi is trying to offer a “one-stop-shop” so there’s no need to go between platforms when making financial decisions — that goes for loans, refinancing, mortgages, savings and checking accounts, credit cards, insurance, investments, retirement, and even crypto. 

As a relatively young FinTech company in the public markets, SoFi is still in high growth mode with choppy price action, so we’ll have to wait and see whether it can hang on to these gains or not. The company has also been marketing aggressively to Millennials and Gen Z. In a recent effort to bring new members on board, the #SoFiMoneyMoves campaign was launched on TikTok, which has accumulated over 5 billion views in a matter of weeks.

All eyes will be on member growth, revenue growth, and guidance on profitability over the next few quarters, so we’ll have a better picture from November 10 and beyond on what the future holds for SoFi and how its strategy plays out.

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