SoFi, Upstart, PayPal snag Buy ratings as BTIG starts new fintech coverage
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Shares of PayPal Holdings (NASDAQ:PYPL), +1.3%, SoFi Technologies (NASDAQ:SOFI), +2.6%, and Upstart Holdings (NASDAQ:UPST), +1.4%, all advanced in premarket trading as BTIG analyst Lance Jessurun started coverage of the fintech firms with Buy ratings. Other Buy-rated initiations featured Jack Henry & Associates (NASDAQ:JKHY) and Oportun Financial (NASDAQ:OPRT). 
In a note to clients, Jessurun said he prefers "names tied to recurring IT spend, and are cautious on names tied to consumer discretionary spend." 
SOFI and JKHY are most favored in the eyes of Jessurun as "we believe JKHY should outperform in a strained environment, especially with shares trading at a discount to historical averages, and SOFI should be a long-term winner in the neobank space."
For SoFi (SOFI), in particular, the fintech bank is well-positioned to succeed against a gloomy consumer financial spending outlook, "given strong, diversified revenues, rapid deposit growth, and high levels of member uptake of new products," the note said. Another catalyst that could drive up the stock price is the possible end to the federal student loan payment moratorium. 
 Neutral-rated initiations: Open Lending (NASDAQ:LPRO), Block (NYSE:SQ), Green Dot (NYSE:GDOT) and Marqeta (NASDAQ:MQ). Affirm (NASDAQ:AFRM) is the only stock that nabbed a Sell rating.
Affirm's (AFRM) bearish coverage is due to the Buy Now, Pay Later platform's exposure to discretionary spending and expense growth outpacing revenues. Shares slid 4% at the time of writing.
Its business model is coming under pressure as "rising rates are impacting funding costs and the gain on sale premium, while both variable and fixed costs are outstripping revenue growth," Jessurun said.
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Is Upstart Stock A Buy Or Sell Now?
SoFi Technologies: Student Loans Return Is A Turning Point
PayPal: In Search Of A Turnaround
Jack Henry & Associates: Positioned For Accretive, Integrated Growth
Affirm: Buy Now, Pay The Price later