SoFi stock price target raised to $26 from $20 at Mizuho on strong growth

Investing.com - Mizuho (NYSE:MFG) raised its price target on SoFi Technologies (NASDAQ:SOFI) to $26.00 from $20.00 on Thursday, while maintaining an Outperform rating on the stock. The fintech company, currently trading at $23.32 with a market capitalization of $27.4 billion, has seen its shares surge 42% year-to-date.

The firm cited SoFi’s "very strong" second quarter performance across all important metrics, with the lending platform business showing outstanding growth, reaching $9.5 billion of annualized origination volume. According to InvestingPro data, the company maintains an impressive 82% gross profit margin, though analysis suggests the stock is currently trading above its Fair Value.

Home lending originations grew over 90%, which Mizuho views as "simply the beginning" given the current weak housing mortgage market conditions.

Following the strong quarterly results, Mizuho increased its fiscal year 2025 revenue estimate to $3.4 billion from $3.3 billion previously, while raising its FY25 adjusted EBITDA forecast from $891 million to $965 million, above company guidance.

The new price target is based on approximately 6 times FY27 estimated adjusted net revenue, compared to SoFi’s current trading multiple of about 6x and the fintech growth peer group median of approximately 5.7x.

In other recent news, SoFi Technologies reported strong second-quarter results that surpassed both Needham’s and Wall Street’s expectations for earnings and revenue. This performance was largely driven by growth in SoFi’s loan platform business. Following these results, Needham raised its price target for SoFi Technologies from $20.00 to $25.00, maintaining a Buy rating. Additionally, SoFi announced a $1.5 billion public offering of common stock, pricing 71,942,450 shares at $20.85 per share. The company granted underwriters a 30-day option to purchase up to an additional 10,791,367 shares. The proceeds from this offering are intended for general corporate purposes, including working capital and other business opportunities. The offering is expected to close on July 31, 2025, subject to customary conditions.

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