Shares of fintech giant SoFi (NASDAQ:SOFI) have nosedived in the past week. President Joe Biden extended the moratorium on student loans by another four months to Aug. 31, forcing SoFi to cut its 2022 guidance. In a statement issued on April 6 by President Biden, he remarked how student loan borrowers could face immense financial struggle if loan repayments were to resume in less than a month. Hence, he extended the pause from May 1 to Aug. 31.

Student loans contribute substantially to SoFi’s business; hence the guidance revision was on the cards. It now expects its adjusted sales to be at $1.47 billion, down from its previous guidance of $1.57 billion. Moreover, the adjusted sales also fall short of the $1.55 billion consensus estimates.

Nevertheless, CEO Anthony Noto believes that the company will continue growing its top and bottom lines despite the extension. It is largely down to the fact that SoFi has notched double-digit revenue growth even though its student loan refinancing business operated under 50% of pre-Covid 19 levels in the past couple of years.

Regardless, the management guidance represents an impressive 45% increase in adjusted sales growth from last year to $1.47 billion. Additionally, it indicates three times the increase in adjusted EBITDA and a doubling of margins. SOFI stock has cratered since going public last summer. These negative developments will exasperate its woes and feed into its bear case. However, the business has been firing in the past couple of years, even with weak results from student loan refinancing. SoFi’s revenues in the past year have risen by a spectacular 73%. Therefore considering its strong performance of late, the bearish enthusiasm surrounding SOFI stock seems overblown.

On the date of publication, Muslim Farooque 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 InvestorPlace.com Publishing Guidelines