2023-10-27 12:18:38 ET
Online personal financing firm SoFi Technologies ( NASDAQ: SOFI ), which is set to report Q3 results on Monday, Oct. 30, is expected to have strong earnings, as some analysts expect a profit beat.
The company that provides financial products like student loan refinancing, and mortgages, among others, is poised to benefit from the resumption of student loan payments.
In Oct., a pause on student loan payments for over three years due to the COVID-19 pandemic came to an end, with interest beginning to accrue on loans again on Sept. 1, and payments will be due this month.
Stocks most closely linked to student loans like SOFI, have had a rough past three months.
U.S. households have about $1.765T of student loan debt as of June 30, 2023, the most recent data available from the Federal Reserve System. That amount is down from $1.775T on March 30, 2023.
Earlier in Oct., Mizuho analyst Dan Dolev said he's not concerned about SOFI's lending capacity.
"We believe that the weakness in SOFI's stock stems from investor concerns that SOFI has limited lending capacity, and may need to raise equity," he wrote in a note to clients.
The fintech company, which could also possibly raise its guidance for 2023, had added more than 1M members to its membership base in the first half of the year and is expected to continue that momentum in Q3.
Shares in the company up 54.3% on a year-to-date basis, and up 29.8% on a one year.
However, not every analyst sees SOFI's Q3 to get that boost from student loan payments.
SA contributor SL Investments believes the evidence of worsening macroeconomic conditions, and signs of decline in the demand for personal loans can create headwinds for SOFI.
The company had seen a great Q2 with revenue exceeding Wall Street consensus as personal loan originations climbed and the company attracted new members with good credit scores, which boosted deposit levels at lower cost of funding.
The consensus EPS Estimate is -$0.0 8, and the consensus Revenue Estimate is $515.56M (+21.6% Y/Y).
Over the last 1 year, SOFI has beaten EPS estimates 50% of the time and has beaten revenue estimates 100% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 2 downward. Revenue estimates have seen 6 upward revisions and 6 downward.
More on SoFi Technologies
- Why SoFi Technologies Could Rally After Q3 Earnings (Upgrade)
- SoFi Is Still A Sell On Macro Headwinds
- SoFi Technologies' Future: Can It Validate Its Premium Valuation? I Don't Think So
- Student loan servicers' customer service attracts federal scrutiny - report
- SoFi stock advances as Mizuho defends its lending capacity
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Will SoFi Technologies benefit from resumption of student loans payments in Q3?