SoFi (SOFI), H.B. Fuller (FUL) Retreat on Negative Developments

SoFi (NASDAQ:SOFI) and  H.B. Fuller (NYSE:FUL) are among today’s prominent losers in the stock market. SoFi is a fintech firm that also provides loans while H.B. Fuller markets specialty chemical products, such as adhesives, sealants, coatings, polymers, and tapes.

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SoFi is dropping 6.5% after its shares were downgraded to Underperform from Market Perform by investment bank KBW. Calling the valuation of SOFI stock “overstretched,” KBW warned that the firm would have trouble meeting analysts’ 2026 earnings per share outlook. Moreover, KBW will have difficulty reaching its own long-term target for return on tangible common equity of 20%-30%, the investment bank believes.

A professional banker shaking hands with an entrepreneur in a boardroom setting.

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KBW set a price target on the shares of $8, well below their current level of around $14.40.

Turning to H.B. Fuller, the firm predicted today that its adjusted earnings per share would come in at about $3.84 for fiscal 2024. Since analysts’ average estimate for the company’s full-year EPS was $4.16, the Street was disappointed by the company’s update.

What’s more, H.B. Fuller cut its full-year adjusted EBITDA outlook to about $594 million, from its previous guidance of $610 million to $620 million.

The company explained that its Q4 results were negatively affected by “weaker than expected conditions and delayed orders, particularly in consumer product goods and packaging related end markets as well as durable goods distribution.”

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While we acknowledge the potential of SOFI, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SOFI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.