JPMorgan upgrades to "overweight", analysis of sofi's fundamental + technical resonance

$SoFi Tech(SOFI.US)

JP Morgan analyst Reginal Smith upgraded SoFi's investment rating from "Neutral" to "Overweight" on Tuesday, maintaining a target price of $31. At the current stock price, this target implies a potential upside of about 40%.

Looking at the broader fintech industry, the environment remains chilly, with many companies facing pressure from layoffs, losses, and even business contraction. However, SoFi has clearly bucked the trend, with not only a continuous rise in user numbers but also rapid expansion in deposit size, indicating that its competitive advantage is further widening the gap with peers.

In terms of business structure, SoFi has a loan portfolio of approximately $40 billion, providing a solid profit foundation. Meanwhile, its technology platform business, driven by steadily growing service fee income, exhibits characteristics similar to high-margin software companies. This diversified profit model, combining financial and technological attributes, makes SoFi distinctly different from—and superior to—traditional banks in terms of valuation.

On the operational front, previous advice suggested starting to build positions in batches at $22.5. Tuesday's trading saw a high-open-low-close pattern. From a weekly K-line perspective, the stock price has touched the 50-day moving average, with Fibonacci retracement at the 50% level. On the daily K-line, the stock price is near the annual moving average, closing with a long lower shadow and increased volume, indicating strong support around $21 and preliminary signs of a trend reversal.

Operational outlook:

If the stock price falls below $20.5 tomorrow, be wary of a trend breakdown, with support levels around $18-$19.

If a strong bullish candlestick forms tomorrow, it would suggest today's pullback has bottomed out, potentially signaling a short-term rebound.