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Why is SoFi Stock Down Today After Valuation Concerns

SoFi Technologies, Inc. (SOFI) saw a slight decline in its stock price on December 3, 2024, closing at $15.88, down 0.19% from the previous day's close of $15.91. The stock opened at $15.89 and fluctuated between a high of $16.15 and a low of $15.62 throughout the trading day. Trading volume was 43,481,464 shares, which is about 84.75% of the average daily volume, indicating moderate investor activity. The stock's movement was influenced by J.P. Morgan's recent price target adjustment from $9 to $16, reflecting a positive long-term outlook for the fintech sector. However, the bank maintained a Neutral rating on SoFi, citing concerns over its accounting practices, which may have tempered investor enthusiasm.

Despite the positive price target revision, SoFi's stock faced pressure due to broader market volatility and concerns over its valuation. The company is currently categorized as "Significantly Overvalued" with a GF Value estimate of $8.22, raising caution among investors. Additionally, SoFi's recent financial performance, including a 102% increase in its financial services segment in Q3, highlights its growth potential, but the high P/E ratio of 159.1 suggests that investors have already priced in significant growth expectations.