Raising My SoFi Price Target Amid Extremely Bullish Posture

I really don't like to write on the same stock more than once a month. And I really, really don't like to write on the same stock twice within two weeks, especially when I was off for a week in the middle. This is, however, a necessary update. 

We have had three runners of late among what were our core "Stocks Under $10" long positions back when that model portfolio was still a standalone offering here at TheStreet Pro.

We have taken our target price for Palantir Technologies PLTR up to $48. That stock is up 179% from its January low. I imagine that I will be forced to increase that target again sooner or later. We took our target price for Rocket Lab USA RKLB up to $14 earlier this week. That one is up 222% since its April low. 

Now, we have to take another look at SoFi Technologies SOFI. This stock is up 82% since just early August and surpassed our $10.25 target this week that I reiterated on October 9.

It's fairly safe to say that the "Stocks Under $10" portfolio may no longer be a "thing," but we have kept it going in spirit and we are absolutely crushing the market this year. Our former benchmark, the Russell 2000, is up just 16.8% from its 2024 low, and up just 11% from the lows of June and August. If you've stuck with us, congratulations.

This Morning

Dan Dolev, who is a three-star rated (by TipRanks) analyst at Mizuho Securities, reiterated his "buy" rating on SoFi Technologies, while increasing his target price from $12 to $14. Dolev has been upgraded by TipRanks from being a one-star analyst to a three-star, bordering on gaining a fourth star in just a few months' time.

Interesting 

On September 30, almost 18% of SoFi Technologies' entire float, more than 181 million in shares, was held in short positions. On Thursday, that short position was updated to show still more than 180 million shares held short. That means that, through this increase in the share price, there has not yet been a lot of short covering. One might surmise that with earnings due next week, ahead of the opening bell on Tuesday, that a solid print or some key words written in the press release or said during the call, could act as a catalyst for a still unprovoked short covering. 

About Those Earnings

As mentioned, SOFI is expected to report next Tuesday morning. Wall Street is looking for a GAAP EPS of $0.04 on revenue of $634 million. If these numbers are realized, this will be the firm's fourth-consecutive quarter of GAAP profitability, while reflecting revenue growth of more than 19%. As I wrote two weeks ago, of the nine sell-side analysts I know of who follow this stock, all nine have increased their Q3 earnings estimates for SOFI since the start of the third quarter.

The Chart

Readers will see the same falling-wedge pattern and same double-bottom reversal pattern that I showed you two weeks ago. What's different is that the last sale has run from $8.50 then to a pre-opening $11.30 on Friday morning. That has taken our reading for Relative Strength from a strong 65 to a technically-overbought 78.

The daily MACD is also postured extremely bullishly now, with the 12-day EMA running above the 26-day EMA and the histogram of the nine-day EMA now in positive territory for three weeks. At this point, I am looking for the stock to consolidate, though just ahead of earnings and sitting on an elevated short position, that might be asking a lot.

For the purposes of having a plan, and not because I recognize a new setup, I am placing a new pivot at the $10.65 level that had been resistance for the stock on both Wednesday and Thursday. I'll do the math from there.

SoFi Technologies (SOFI)

• Target Price: $13.50 (up from $10.25)
• Pivot: $10.65 (up from $8.30)
• Add Some: Down to 50-day SMA (currently $8.20)
• Panic: On a loss of both the 50-day and 200-day SMAs.

At the time of publication, Guilfoyle was long SOFI, RKLB and PLTR equity.