SoFi Stock Price (SOFI) Drops 8.25% After a Q4 Double Up

SoFi Technologies' stock (NASDAQ: SOFI) began 2025 with a red day, shedding 8.25% after a double up in Q4. With the SOFI price hitting levels not seen in more than 3 years after gaining 101.83% from October through December, some profit taking on the back of an analyst downgrade can not be discounted.

Without a fundamental shift in the company, and with broader markets relatively stable (Nasdaq 100 down 0.17%), the cutting from market perform to underperform from Timothy Switzer, an analyst at Keefe, Bruyette & Woods, could have added weight to the downward move.

Along with the downgrade, Switzer adjusted his price target upwards from $7 to $8 per share. With SOFI's stock price currently in the low $14 range, this reflects significant potential downside. Switzer's downgrade was largely influenced by the significant gains SoFi shares achieved in 2024, rising more than 50%, which he believes has led the stock to be overvalued. This increase was partly due to investor optimism post-U.S. presidential elections and favourable macroeconomic conditions with lower interest rates.

Switzer expressed concerns about SoFi's overvaluation and its ambitious long-term targets, suggesting that the recent surge in stock price is unsustainable under current market dynamics. While the broader market also witnessed a slight decline, it was not enough to overshadow the steep fall in SoFi shares, highlighting the impact of Switzer's analysis on investor sentiment.

Despite Switzer's bearish outlook, other analysts and investors see potential in SoFi's fundamentals. Some believe the company's innovative approach and growth prospects could make it a promising buy candidate in the longer term. Morgan Stanley increased their price target on the stock from $7.50 to $13 on 19th December, but maintained an underweight rating.

Consensus price targets remain below current price-action, but with the new year just underway, there could be further shifts in the days and weeks ahead.

The fall in SoFi shares can be put in context a little when zooming out to longer time-frames, but with the stock being one to trend strongly in either direction, holders will be hoping that this is a blip rather than a break of the bullish trend. With fundamentals unchanged, it is important to consider the wider gamut of factors in play, including those of analysts when making any moves.