By means of a sign

(Reuters) – SoFi Technologies shares fell 6 percent on Thursday after KBW downgraded the fintech firm’s stock on concerns about lofty valuations and ambitious financial targets, further cooling a months-long rally.

Analysts at the brokerage firm gave the stock an “underperform” rating and set a price target of $8 — about half of SoFi’s last closing price.

The move reflects the challenges and high expectations that SoFi, a digital banking and brokerage app that offers loans, credit cards and investment services, faces as it transitions into a mature financial services provider.

The brokerage said a strong economy, low interest rates and the company’s “achievement of improved scale and profitability … justify shifting our investment thesis to a more long-term view of what a mature SoFi looks like.” ” said the brokerage.

“Stock valuations are overextended in a wide matrix of multiples.”

The brokerage added that the company’s long-term target of earnings per share and 20%-30% return on tangible common equity (ROTCE) for 2026 will be difficult to achieve.

Shares last traded at $14.53 and are headed for a fourth straight loss if current levels hold. By last close, they had nearly doubled since October.

The company trades at 69 times projected earnings for 2025, while the median for consumer digital lenders is 12.2, according to KBW.

Sophie did not immediately respond to a request for comment.

(Reporting by Nikit Nishant in Bangalore; Editing by Krishan Chandra Elori)