SoFi stock price prediction: Down but not out
- SoFi stock price has crashed to an all-time low.
- There are concerns about its growth amid the student debt moratorium.
- The cryptocurrencies and the stock market are not doing well.
The SoFi stock price is not done crashing yet. The shares dropped to a record low of $6.40 last week, bringing its total market cap to above $5 billion. The downward momentum accelerated on Monday as it dropped by over 3% during the extended period.
What next for SoFi Technologies?
SoFi Technologies had a spectacular performance in 2020 as investors placed bets on its large and fast-growing ecosystem. As a result, the stock price surged to an all-time high of $28.34, pushing its total market capitalization to more than $18 billion.
The past few months have been difficult for SoFi and other fast-growing fintech companies like Affirm, PayPal, Block, and Remitly among others. A closer look shows that most of their shares have crashed by more than 50% from their all-time high.
In addition to the macro challenges as the Fed turns hawkish, there are several reasons why the SoFi stock price has crashed in the past few months.
First, the Biden administration announced that it would extend its student debt moratorium in a bid to cushion students from the tough environment. And last week, the administration said that it would forgive student debts of about 50,000 students. These actions are notable because SoFi makes most of its money from student debt.
Second, SoFi has a service that lets people buy cryptocurrencies. Like Robinhood and Coinbase, companies with exposure to the sector have plunged as prices remain extremely volatile. Indeed, Bitcoin has crashed below $40,000 while Ethereum has dropped to below $3,000.
Third, the stock has crashed because of the underperforming stock market. The company has tools that help people buy and sell stocks.
Still, the current drop has made SoFi to be a good speculative buy. The firm has a strong and growing market share and it is expanding its non-loan products. Indeed, in the most recent quarter, the firm’s Financial Services Products had over 4.1 million members while its lending had just 1.07 million.
SoFi stock price forecast
The daily chart shows that the SoFi share price has been in a strong bearish trend in the past few months. As a result, the stock has managed to move below the 25-day and 50-day moving averages. It has also dropped below the important support levels at $10.10 and $7.70, which were the lowest levels on November 30th and March 14th, respectively. The Stochastic Oscillator has moved to the oversold level.
Therefore, there is a likelihood that the stock will start crawling back in the coming weeks as investors wait for the upcoming earnings in May.