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SoFi Technologies (SOFI) may be facing one of the deepest ironies on Wall Street. Whenever a publicly traded enterprise enjoys resounding success in the market, the upswing itself represents one of the biggest headwinds. Part of the problem centers on liquidity and positioning saturation. Effectively, after a parabolic run, most buyers are already in. Thus, momentum slows not because the narrative has faded but because there’s no marginal capital left to give chase.

When assessing SOFI stock, it’s really a tale of two cities. On the one hand, early stakeholders have been drunk with joy regarding the blistering performance. Since the beginning of this year, SOFI has gained nearly 72%. Over the past 52 weeks, the equity has skyrocketed to the tune of over 220%. And better yet, investors are up almost 169% in the trailing six months.

However, these red-hot stats bring up the other side of the story: prospective investors may fear holding the bag. Among the recent analyst downgrades were two strikes against SOFI stock. Within the last several days, analysts at Morgan Stanley and Compass Point downgraded the fintech giant to Sell.

Raising eyebrows, Morgan Stanley’s price target of $18 implies about 32% downside, while Compass Point’s projection of $12 represents about a 55% collapse.

While these forecasts sound alarmist, they would effectively bring SOFI stock down to levels last seen during this spring and early summer. From an objective standpoint, that might not be unreasonable given that SOFI stock now trades at nearly 10X trailing-12-month (TTM) sales. Around this time last year, the metric was approximately 3.4X.

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On a quantitative level, SOFI stock has printed an accumulation-heavy 8-2-U sequence: eight up weeks, two down weeks, with an overall upward trajectory. Historically, this behavioral state has yielded choppy trading that typically resolves upward.

Recently, SOFI printed eight consecutive upweeks, which may have contributed the red ink witnessed in late September. Right now, though, the bulls have considered the volatility as a discount. While SOFI’s rally may stretch credulity, the empirical argument does favor the optimists.

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