If it walks like a bank and talks like a bank, should its stock be valued like a bank's?
That’s the issue at hand for Morgan Stanley analyst Jeffrey Adelson as he evaluates SoFi Technologies Inc. SOFI.
“We previously valued [SoFi] on a growth-adjusted basis, given strong growth well above most banks/consumer lenders,” Adelson wrote Thursday. “But as [SoFi] looks increasingly like a bank, we believe it needs to be valued more like a bank.” In addition, he noted that SoFi’s stock price implies a 2.1-times valuation for the bank on the basis of tangible book value per share.
Additionally, he joined several other analysts in voicing concerns over elevated assumptions about SoFi’s ability to benefit from recent policy developments around student loans. While SoFi estimates a $200 billion total addressable market for refinancing once the moratorium on student-loan payments ends, Adelson thinks the market opportunity is roughly half that.
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