Why SoFi stock fell 16% this week

shares of SoFi technology (Sophie -2.38%) Stocks fell 16.6% this week after prominent Wall Street analysts downgraded banking and fintech services stocks, according to data provided by S&P Global Market Intelligence.

This analyst is cautious about SoFi stock.

Keefe, Bruyette & Woods analyst Mike Perito downgraded SoFi to below market performer and set a price target of $7.50 per share in a note to clients early Wednesday. The price was lowered from $6.50 to $6.50.

Justifying his relatively bearish stance, Perito pointed to SoFi’s stock rallying more than 40% following an impressive third-quarter report in early November. He also said that given fair value accounting, lower interest rates next year could weigh on SoFi’s earnings, particularly as it relates to the reported value in a given quarter of the unsecured personal loans SoFi holds on its balance sheet. I am concerned that there is a gender.

Perito said that for every quarter-point cut in the federal funds rate this year, SoFi’s reported sales could be affected by about $50 million, or about $0.05 in earnings per share. We estimate that there is.

What’s next for SoFi investors?

In fact, I wrote an article a few months ago explaining why the Fed’s rate hikes have only accelerated SoFi’s growth and path to profitability. However, in the same article, I also highlighted the comments of his CEO of SoFi, Anthony Noto. It explains how, with the help of national banking regulations and a superior cost structure compared to traditional banks, SoFi is able to maintain its own interest rate for longer, and the federal funds rate. Higher than competitors even though it is starting to decline.

I will use this exit as an opportunity to enhance my position, as SoFi management expects the company to report its first-ever generally accepted accounting principles (GAAP) net income with its fourth quarter report later this month. I’m completely satisfied with that.