SoFi Stock Drops: What's Going On?

SoFi Technologies Inc (NASDAQ:SOFI) shares are dropping Monday. Keefe, Bruyette & Woods lowered its price target on the stock. Here’s what you should know. SoFi Technologies stock is showing weakness. What’s driving SOFI stock lower? Analyst Sees Rate Headwinds, Capital Pressure at SoFi Timothy Switzer, an analyst at Keefe, Bruyette & Woods, reiterated Underperform on SoFi on Monday and reduced the price target to $15 from $16. Switzer tied the move to SoFi’s coming third-quarter report, and said the firm prefers to stay cautious. Switzer first raised concerns in the firm’s second-quarter recap. SoFi’s fair value accounting leaves little room to meet guidance in quarters when rates spike, Switzer said, unless the company draws down capital at a faster pace. In the third quarter, rates moved higher while SoFi’s balance sheet swelled. Switzer puts the combined cost at more than $1 billion for the quarter, a figure that excludes any relief from hedges. The likely outcome is another round of strong loan growth and a thinner capital cushion. Switzer’s expectations still have SoFi matching consensus estimates and company guidance this quarter. Yet the more than $1 billion hit puts that outcome at real risk, Switzer said. The analyst expects the pressure to leave SoFi with a weaker revenue mix and less capital, which underpins the underweight view. SOFI Shares Are Dipping SOFI Price Action: SoFi shares were down 2.78% at $15.36 at the time of publication on Monday. The stock is trading near its 52-week low of $14.88, according to Benzinga Pro. .benzinga-widget#bz-embed-widget-block_6e6835554a4894ff483ac0a92b4cdfc0 iframe.w-full { width: 100%; } Read Also: Apple Stock Climbs as JPMorgan Lifts Target, BofA Reiterates Buy Image: Shutterstock