SoFi Technologies (NASDAQ: SOFI) has a new fan on Wall Street. Needham & Co. analyst Kyle Peterson initiated coverage of the consumer-focused digital bank on Wednesday with a buy rating.

Citing SoFi's advantages over its peers in the digital lending space, Petersen gave the bank a $10 price target that implies a roughly 31% gain for the stock over the next 12 months or so.

SoFi has a couple of big advantages over most banking start-ups. First, it obtained a national bank charter in 2022 that allows it to fund new loans using customer deposits. Peers in the digital lending space that lack a banking charter, such as Upstart need to share a large portion of each transaction with their banking partners.

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Source Fool.com