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SoFi
Technologies stock surged as investors welcomed an upbeat forecast from the financial services company.
SoFi
stock (ticker:
SOFI
) was up 6.3% to $11.91 on Wednesday.
For the first quarter of 2022, SoFi expects to generate between $280 to $285 million in revenue, up 30% to 32% year over year, while the consensus call on Wall Street was for revenue of $297 million. First-quarter revenue would be higher had the federal government not extended its moratorium on federal student-loan payments to May 1, the company said as it reported its earnings on Tuesday.
The company estimates the negative impact of the moratorium to be between $30 million to $35 million in revenue.
Wall Street is optimistic that SoFi can deliver better results throughout the rest of the year. Management expects adjusted revenue will grow 55% in 2022 to $1.57 billion, with adjusted earnings before interest, taxes, depreciation, and amortization of $180 million. The consensus call among analysts surveyed by FactSet was for annual revenue of $1.49 billion.
The company expects student-loan refinancing volumes will rise after the moratorium expires. It also believes that SoFi Bank, which it began operating in February, will contribute more meaningfully starting in the second quarter.
For the fourth quarter of 2021, SoFi reported a loss of 15 cents a share, beating estimates for a 16-cent loss. Unadjusted revenue was $286 million, above management’s guidance and Street consensus forecast. The bank added 523,000 new members in the fourth quarter, ending the year with approximately 3.5 million total, up 87% from the start of the year, said CEO Anthony Noto.
SoFi’s yearly unadjusted revenue was $985 million, lower than estimates for $1 billion, with a loss of $1 per share.
“SoFi announced an upside surprise with its 2022 guidance, coming in well above our expectation, and the combination of strong member growth and product sales in 4Q provides positive momentum heading into 2022,” wrote Wedbush analyst David Chiaverini in a note on Wednesday.
Chiaverini rated the stock Outperform with a $20 price target, saying the company is poised for strong growth over the next five years as its brand makes progress among younger people.
“The company is a one-stop shop for financial services and this is a significant competitive advantage over neobank competitors who tend to focus on niche offerings rather than the full financial picture,” he added.
Oppenheimer analyst Dominick Gabriele also gave the stock an Outperform rating, saying that the company’s underlying assets could drive growth as the bank continues scaling up its operations. Positive factors for the near term include a continued acceleration in sales in its financial services segment, lower funding costs, and a re-emergence of demand for consumer credit, the analyst said. Gabriele’s price target for the stock is $18.
Write to Sabrina Escobar at [email protected]
George is Digismak’s reported cum editor with 13 years of experience in Journalism