SoFi Technologies is no longer rated Buy. The report of 14 October reaffirmed the Buy with an ideal range of $15.00 to $15.95, a cut-loss at $14.45 on a daily close, and targets of $18.61 and $22.02. That same day the stop was hit. The new rating is Watchlist.

Q: What happened to the trade?

A: On 14 October, the day September consumer prices came in hotter than expected, the shares fell 6.7% to close at $14.22, below the $14.45 stop. A holder who followed the plan exited at or near that close, about 6.7% below the $15.24 entry. The next morning the stock touched a 52-week low of $13.86, and it closed at $14.55 on 16 October. The stop is not being moved lower to keep the rating alive. The range, the stop and both targets are withdrawn.

Q: Did something go wrong at the company?

A: No. Second-quarter revenue grew 40% and members 35%, and nothing announced since changes what SoFi earns. The pressure came from inflation. Consumer prices rose 3.7% on the year and producer prices jumped 1.3%, the most since March 2022. That makes a rate increase at the 27 to 28 October Fed meeting more likely. Brokers also expect the third quarter to carry a large fair-value mark on loans, after long yields ended September near their highest since 2007. KBW has put it above $1 billion before hedging.

Q: Why not stay at Buy at a lower price?

A: Because the value fell too. Weighted fair value drops to $15.79 from $18.61. The bull case is $23.75 at 20%, the base case $16.80 at 50%, and the bear case $8.79 at 30%, which assumes a mark that pushes profit below guidance. That leaves about 8.5% of upside against a bear case close to 40% below the price. The risk is not being paid. The investment score slips to 70.2 from 71.2, with Risk cut to 3 from 4.

Q: What would bring the Buy back?

A: Two routes. The first is price: the new watch price is $12.50, about 1.7 times tangible book. The second is the quarter itself. A third-quarter report that holds full-year guidance after the mark would remove the bear case’s main driver and could bring the Buy back nearer the current price.

Q: When is the next test?

A: Third-quarter results are due on 27 October at about 7am ET, with the call at 8am ET. The Fed meeting opens the same morning, so the shares may face both answers in one session.

The scenario arithmetic and the full scorecard are laid out in the complete SoFi Technologies (SOFI) report on our Reports page.