SoFi Technologies (NASDAQ:SOFI) stock experienced a 3.7% gain in late morning trading following positive remarks from Mizuho analyst Dan Dolev. Dolev stated that he is not worried about the company’s lending capacity, which has been a concern for investors causing the stock to decline by 7.6% since September 14th. Mizuho’s analysis of SoFi’s balance sheet reveals that the company has ample capacity to originate personal and student loans for 5-6 quarters without selling loans. Furthermore, SoFi could maintain a lending runway for up to seven quarters if they sell around 10% of their Q2 2023 annual run-rate originations.
Additionally, SoFi’s management anticipates achieving positive GAAP net income by the end of the year. Dolev estimates that for every $100 million of net income, SoFi can add $750 million to $800 million of incremental lending capacity. Despite the positive analysis, Dolev’s Buy rating on the stock contradicts the Hold rating by both the SA Quant and average Wall Street ratings. However, the average SA Analyst rating remains at Buy.
This optimistic outlook provided by Mizuho analyst Dan Dolev has caused a boost in SoFi Technologies’ stock. The concerns regarding the company’s lending capacity have been addressed, as Mizuho’s analysis indicates that SoFi has ample capacity to originate loans for multiple quarters. Additionally, the expectation of achieving positive GAAP net income by year-end bodes well for the company’s future. Although some rating agencies hold a Hold rating on the stock, Dolev maintains a Buy rating based on his analysis, demonstrating confidence in SoFi’s potential for growth.