Investors in SoFi Technologies (NASDAQ:SOFI) have certainly had it rough over the past year. Shares of SOFI stock are down more than 25% year-to-date (YTD), vastly underperforming most of the firm’s tech peers. Since yesterday’s close alone, SOFI stock has dipped more than 10% as of this writing
This move comes after the company released its . While the company beat on the top and bottom line, investors seem to be focusing more intently on its forward guidance. SoFi brought in EPS of 2 cents, beating analyst expectations of 1 cent per share. On the revenue side of the ledger, SoFi’s net revenue of $580.6 million was also a healthy beat over expectations for $559.5 million in sales.
However, the company also noted that its expected net revenue for its upcoming quarter will come in between $555 million and $565 million, compared to an analyst consensus estimate of more than $590 million. Additionally, Q1 revenue came in below the prior quarter’s sales, suggesting a downtrend is now building with this fintech player.
Let’s dive into these numbers and what to make of SoFi’s forward guidance.
SOFI Stock Drops on Soft Guidance
We’re at an interesting point in the economic cycle, where most analysts and investors are focused more so on companies’ forward-looking prospects than their backward-looking results. Such is clearly the case with SoFi today.
Analysts expected a downturn in revenue and earnings this quarter, which didn’t really materialize. Unfortunately, though, this downturn is expected to be felt next quarter, as the company expects to see what it calls a
That’s the kind of language that’s going to spook some investors. Many had expected the company’s recent loan origination growth of more than 20% year-over-year (YOY) to stoke continued outperformance, particularly as student loan refinancing activity should continue to see growth. However, muted growth from the company’s broader lending segment appears to be driving these weaker expectations.
We’ll have to see whether SoFi is sandbagging and setting the bar low ahead of its next earnings report in order to position the company for another beat. But all in all, a revenue decline (that could be more than 4%) isn’t likely to bode well for SoFi’s bid to remain profitable in the coming quarters. Right now, profitability matters — and SoFi is likely going to need to push for greater efficiencies to create bottom-line improvement. While profitability is great, it does appear that the firm won’t produce the kind of growth many investors in SOFI stock want to see currently.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the 黑料正能量.com Publishing Guidelines.
