Stock Market

Don’t Expect Much From SoFi’s Earnings Report

SoFi Technologies (NASDAQ:SOFI) reports its first quarter 2022 earnings on Tuesday after the markets close. If you own SOFI stock, I don’t think you need to worry about any negative surprises. The big elephant in the room — the federal student loan moratorium extended through August — and its effect on its business here in 2022 has already been factored into its share price. 

I also don’t think you can expect much in the way of a home-run quarter. So, if you’re looking for a sign tomorrow that the stock is about to turn higher, you’ll be sorely disappointed. 

While the company’s three major segments — Lending, Financial Services, and Technology Platform — will all deliver growth in the first quarter, it comes with a 14-cent loss according to analyst estimates.

In early April, SOFI stock lost more than 10% in a single day on the moratorium extension announcement. Since then, it’s lost another 31% in a little more than a month. As I write this, the markets are getting hammered once more. The S&P 500 is down 2.34% in less than two hours of trading.

SoFi didn’t adjust its first-quarter guidance despite all the doom and gloom. For the entire year, it cut revenue by 6% from its previous guidance of $1.57 billion to $1.47 billion while cutting adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by 44% to $100 million.

Even with those cuts, its adjusted revenue is expected to grow by 45% in 2022 while its adjusted EBITDA triples and margins double.

The last time I covered SOFI stock in April, I discussed how it remains a big position in the VanEck Social Sentiment ETF (NYSEARCA:BUZZ), which invests in 75 large-cap stocks that get the most online buzz. While not all the buzz is good, it’s essential that tomorrow’s earnings report and conference call work to keep investors engaged in SoFi’s story. 

If you own SOFI stock, the best you can hope for tomorrow is that CEO Anthony Noto provides more clarity about the company’s future growth beyond student loans. I don’t have any doubt that he will. 

Unfortunately, it’s unlikely to help SOFI stock in the near term.

On the date of publication, Will Ashworth did not have (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 Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.