SoFi Technologies’ stock is experiencing a period of consolidation this week, caught between the weight of a significant new share offering and a robust third-quarter earnings report. The equity, which closed the previous session at $26.58, is attempting to find stability. A key question for traders is whether it can reclaim the $27.50 price level set by its recent capital raise.
Financial Performance Provides a Solid Foundation
The company’s Q3 results delivered growth that exceeded expectations, offering a counterbalance to recent dilution concerns. SoFi reported GAAP revenue of $961.6 million, with adjusted net revenue coming in at $950 million. Earnings per share (EPS) of $0.11 surpassed the analyst consensus estimate of $0.09. Management highlighted strength in its Financial Services and Technology Platform segments, which are successfully diversifying revenue streams away from traditional lending. Furthermore, membership is growing within its newer cryptocurrency offerings, approaching the one-million-user milestone.
Market Digests a $1.5 Billion Capital Raise
The primary pressure on the share price currently stems from market evaluation of the dilutive effect of a $1.5 billion secondary offering. The company placed approximately 54.5 million shares at $27.50 each. With the stock now trading below that placement price, the $27.50 mark has become a near-term technical resistance zone. During Tuesday’s session, shares reached an intraday high of $26.74 before settling at $26.58. The area around $26.50 is showing initial signs of support. A sustained breakout above $27.50 would be interpreted as a clear signal that the market has fully absorbed the impact of the capital increase.
Should investors sell immediately? Or is it worth buying SoFi Technologies?
Technical and Sentiment Landscape Remains Mixed
The broader market sentiment toward SoFi is divided. The consensus rating compiled by MarketBeat remains a “Hold,” accompanied by an average price target of $25.69. However, some institutions see notable upside; Citigroup, for instance, recently raised its price target to $37.00. From a chart perspective, the stock is in a consolidation phase. Its previous inability to close decisively above $30, combined with the overhang from the offering, paints a cautious technical picture. Nonetheless, a recent single-day gain of nearly 3% demonstrates underlying resilience.
Key Levels to Watch
The immediate trajectory for SoFi’s stock hinges on its interaction with two critical price levels. A consistent close above $27.50 would suggest investors have moved past the dilution concern and are refocusing on the company’s 38% revenue growth and improving profitability. Conversely, a failure to hold support and a drop below $26.50 could trigger a test of lower support levels. The market’s next moves will clarify whether the solid operational performance or the dilution effect will dominate the narrative in the short term.
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