Shares of SoFi Technologies fell to $16.0 during today's morning trading session -- a decrease of -10.7% that still sees the stock 26.98% above its average analyst target price of $12.6. So there may be further downside for the Diversified Financial stock, which analysts rate as hold on average. Current target prices range from $5.0 to 19.0 dollars per share.
To understand the market's outlook on the stock, we can look at SoFi Technologies's short interest: the proportion of the share float that is tied to short positions. Behind each short position is an investor who believes that the stock will decline in the future. Here, the stock's short interest is 12.5% which means the outlook is split.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
A possible indicator of market sentiment on a stock (besides its share price, of course) is the portion of institutional investors that make up its shareholders. Institutions such as banks, hedge funds, and wealth managers deploy significant resources towards identifying good investments. If they are invested heavily in a given company's stock, it could mean it's a good investment. Or it could mean the company is being targeted by a takeover attempt.
For what it's worth, institutions own 43.4% of SoFi Technologies's shares, which is an average amount. It means that many institutions are invested, but not to the extent that they would be in a stock such as Apple or Amazon, whose institutional ownership rates hover around 60%. Bear in mind that institutional ownership is just one piece of the puzzle in determining market sentiment, and you should not consider this factor alone in making an investment decision.
Overall, there is mixed market sentiment towards SoFi Technologies because of an analyst belief that shares are overpriced, a hold rating, an above average percentage of its shares sold short, and only a small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about SOFI:
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It has trailing 12 month earnings per share (EPS) of $0.12 per share
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SoFi Technologies has a trailing 12 month Price to Earnings (P/E) ratio of 133.3 while the S&P 500 average is 29.3
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The company has a Price to Book (P/B) ratio of 2.83 in contrast to the S&P 500's average ratio of 4.74
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SoFi Technologies is a Finance company, and the sector average P/E and P/B ratios are 20.04 and 1.86 respectively
