SOFI Stock Tumble Proven Analysts Skepticism Right, What to Expect Next?

On 1st November 2022, prominent American online banking platform SoFi Technologies released its earnings report for Q3 2022. For the most part, the earnings beat the forecasts and estimates and reported significant performance. Analysts predicted SOFI stock would witness a jump, though the stock price did not follow the same trend.

Analysts Doubtful for SOFI Stock Price

TheCoinRepublic reported earlier, the estimates for SOFI stock were favorable yet analysts were skeptical before suggesting it to investors. Doubts around the stock price were due to uncertainty if it would witness a rally despite the earnings release.

In addition, analysts believed even if the SOFI stock would go up, several factors would still be there affecting the stock price movement. Some argued given these factors, the stock price could even pull back and go below the existing level.

Now when the SoFi Technologies released its earnings for the third quarter, SOFI stock price tumbled from approx 6.4 USD on November 1st to 5.18 USD at the press time. The stock price dropped over 19.5% in the last five days.

Earnings Release Surprised Surpassing the Estimates

The earnings of SoFi Technologies stated the net revenue remained 424 million USD which is up by 56% year-over-year while earnings were 44.3 million USD.

The fintech company reported adding about 424,000 new members overall during the quarter ended with September 2022. The numbers are approx 118% up and contributed in making the overall members on the protocol 4.3 million.

Overall deposits on the online banking protocol also reached a significant level of 5 billion USD after year-over-year growth of 86%. Meanwhile the company added 1.3 million lending products during the same time with a 24% year-to-date growth. With this to add, the overall lending products on the platform reached up to 7.2 million.

Analysts still are optimistic for SOFI stock given the relatively strong points of the company evident by its recent earnings release. The stock price might have fallen but the company still holds a high valuation.

SoFi Technologies Holds Strong Growth Factors

The American personal finance company started initially with providing student-loans and has expanded and diversified to other sectors like high margin personal loans. Overall loan service portfolio has also been improved in the past.

SoFi Technologies uses a well-known fintech platform used to issue and manage financial products Galileo—acquired in 2020. It helped the company to bring about 124 million accounts on 55 different platforms. This counted as an achievement given the lethargic movement of the overall fintech sector. With this, the company intends to enter the digital B2B payments space worth 200 trillion USD.

Furthermore, the fintech company also holds a relatively better future outlook than estimates. It expects an yearly growth in revenue of 35.6% while earnings of 75.9% in the upcoming year. Such factors make analysts still believe in SOFI stock and hold an optimism. The target price for the stock is 8.04 USD for next year with a “buy” stock rating.

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