Investors may consider SoFi Technologies, Inc. (SOFI), which has been raised to a Zacks Rank #2 (Buy). This rating change is due to rising earnings projections, a major stock price driver. Only changing earnings determine a company's Zacks rating. The system tracks the present and future Zacks Consensus Estimate of EPS estimates from sell-side analysts covering the stock.
Zacks is essential for individual investors because earnings changes strongly influence near-term company price movements. They may struggle to make decisions based on Wall Street analyst rating improvements, which are primarily driven by subjective variables that are impossible to assess in real time.
Zacks is essential for individual investors because earnings changes strongly influence near-term company price movements. They may struggle to make decisions based on Wall Street analyst rating improvements, which are primarily driven by subjective variables that are impossible to assess in real time. The Zacks rating upgrade for SoFi Technologies is a positive statement on its earnings projection that could boost its stock price.
Earnings estimate changes strongly correspond with a company's near-term stock price. Institutional investors utilize earnings and earnings estimates to value a company's shares, which contributes to this relationship. Institutional investors purchase or sell stocks which have a higher or lower fair value due to earnings estimates in their valuation models. Their massive investment moves stock prices.
Rising profit projections and a rating upgrade suggest SoFi Technologies' business is improving. The stock should rise as investors appreciate this better business trend.
Tracking earnings estimate revisions for investment decisions could be lucrative, as empirical research demonstrates a substantial association between them and near-term stock movements. The tried-and-true Zacks Rank stock-rating system leverages earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four earnings-related factors to classify stocks into five groups from #1 (Strong Buy) to #5 (Strong Sell), has an impressive externally-audited track record, with #1 stocks returning +25% annually since 1988. The full list of today's Zacks #1 Rank (Strong Buy) stocks is here.
SoFi Technologies earnings estimate revisions This company expects to earn $0.07 per share in the fiscal year ending December 2024, up 119.4% from the year-ago amount. Analysts keep boosting SoFi Technologies estimates. Over the past three months, the company's Zacks Consensus Estimate rose 8%.
Zacks' rating methodology always has an equal number of 'buy' and'sell' ratings for its universe of over 4000 equities, unlike excessively optimistic Wall Street analysts. Only the top 5% of Zacks-covered stocks are rated 'Strong Buy' and the next 15% are 'Buy' regardless of market conditions. Thus, a stock in the top 20% of Zacks-covered stocks has stronger earnings estimate revision, making it a good prospect for near-term market-beating returns.
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