Lock-up expirations are traditionally bad news for investors. This is the moment when the early comers, generally large shareholders, are finally allowed to offload shares on the market. The fear is the market will be saturated with an over overflow of shares which will drive the price down.

Considering the case for the lock-up expiration of SoFi Technologies (SOFI) shares today (Monday 6/28), Rosenblatt Securities’ Sean Horgan has a clear idea what investors should do.

“We see a unique buying opportunity as a result of this recent selling and ahead of a potentially significant upside catalyst (bank charter approval),” the analyst said. “Pressure from early investors taking profits (and short-selling ahead of the lock-up expiration) are likely to weigh on the stock in the near term. However, we expect SOFI's bank charter approval process to conclude before year-end (adding >25% upside to our EBITDA estimates).”

The bank charter approval (or denial for that matter) is expected in November. Even if the fintech disruptor’s application is denied, with the current depressed share price, Horgan believes the “upside potential of approval outweighs the downside pressure of not getting approved.”

While the analyst also expects other lockup/trading restrictions which will be lifted before the end of the year to add pressure to the shares, there are additional catalysts to take into consideration.

For one, demand for SOFI's core lending products should get a boost from the Federal student loan forbearance which is slated to end on October 1.

Further ahead, a Fed rate hike – which Horgan estimates there’s a 40% chance will take place by 7/27/22 – is another “longer-term tailwind,” especially if SOFI receives a bank charter as it supports the generation of higher net interest income (NII).

“Net/net,” Horgan summed up, “Our base-case price target of $30 and downside case of $17 reflects asymmetrical risk/reward to the upside.” The upside potential in reaching $30 is exactly 62% from current levels. Horgan’s rating remains a Buy. (To watch Horgan’s track record, click here)

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SOFI stock has been listed on the public markets for less than a month, and currently there is only one other analyst tracking its progress. The additional Buy results in the stock’s Moderate Buy consensus rating, while the $27.5 average price target suggests one-year gains of 49%. (See SOFI stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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