SoFi’s stock already bakes in most ‘good news’ on student lending, analyst says

As the student-loan payment moratorium nears its end and in the wake of the Supreme Court’s move to strike down President Joe Biden’s plan to cancel up to $20,000 in student debt, Oppenheimer’s Dominick Gabriele said that SoFi Technologies Inc. shares
SOFI,
+2.16%
already reflect “much of this good news” around the opportunity to capture more refinancing business. Gabriele notes that the company largely targets graduate student loans given that these degrees tend to cost more than bachelor’s and associate degrees. The company “currently originates loans at a weighted average coupon of 6.5%,” Gabriele wrote. “Thus, most would believe SOFI can only refi loans with higher than 6.5% interest rates. Many of the vintages in graduate are still above these levels since 2013. Borrowers could also extend terms to lower monthly payments.” He thinks the company “will continue to execute well” but looks for a “better entry point” into the stock, up 81% on the year. Gabriele has a perform rating on the shares.