SoFi stock price forecast: bullish breakout not confirmed yet

The SoFi (NASDAQ: SOFI) stock price popped by more than 10% on Wednesday after a positive note from analysts at Jefferies. The stock rose to a session high of $17, bringing its total market capitalization to more than $13 billion. It is still about 40% below its all-time high.

The Flywheel opportunity

SoFi is one of the fastest-growing fintech companies in the world. The company provides a suite of financial services products that target the millenials. It offers student loan financing and refinancing, personal loans, credit cards, investing products, insurance, and credit builder solutions. These products are divided into lending, technology platform, and financial services.

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The firm has more than 2.5 million members, up from 704k in the first quarter of 2019. Its Galileo accounts have surged to more than 79 million. In the most recent quarter, the company had more than $237 million in revenue and an EBITDA of more than $11 million. SoFi has also become one of the most popular stocks among retail traders.

The SoFi stock price rose on Thursday after a positive note from Jefferies. In it, John Hecht said that he believes that the company will benefit from the flywheel opportunity. By this, he meant that the firm will continue growing its average revenue per user (ARPU) because of how interconnected its products are.

For example, a university student will use SoFi to refinance their loans. Later on, they will use its credit cards and insurance services. At the same time, they will use its investing products to buy shares and cryptocurrencies.

Jefferies is not the only company bullish on the SoFi stock. In a recent note, an analyst at Mizuho boosted his buy rating on the stock. He said that the company will become a: 

“full-fledged mobile-first, super-app neo-bank with in-house next-gen issuing capabilities (Galileo). We believe this could accelerate a virtuous cycle of increased engagement, boosting revenue and profits”

SoFi stock price analysis

The four-hour chart shows that the SoFi stock price has been in a relatively tight range in the past few days. The stock has also found a strong support at $13.58 and moved slightly above the 25-period moving average. The MACD is at a neutral level while volume has been a bit stable. It is also slightly below the key resistance level at $17.48. 

Therefore, while my overall view for the stock is bullish, I don’t think that this is the start of a new bullish trend. For this to happen, the stock will need to move above the resistance at $17.48 and the 50% retracement at $20.

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