SoFi (NASDAQ:SOFI) stock is trending on social media and climbing 3% in early trading. The company hiked its guidance after its revenue from student loans sharply rebounded, and its fintech platform grew significantly. The U.S. government has reinvigorated the company’s student loan business by ending the moratorium on payments on the loans this month.
SoFi’s 2023 Guidance and Q3 Results
SoFi raised its 2023 revenue guidance to $2.045 billion to $2.065 billion, from its prior outlook of $1.97 billion to $2.03 billion. Additionally, the firm increased its 2023 EBITDA outlook, excluding certain items, to $386 million to $396 million, versus its prior outlook of $333 million to $343 million.
As the end of America’s moratorium on student loans neared last quarter, the value of the company’s student loans soared 101% year-over-year to $919 million in Q3, while its net interest income more than doubled $345 million from $158 million in Q3 of 2022.
CEO Anthony Noto stated on the company’s earnings call this morning:
“67% of our absolute growth in adjusted net revenue dollars was driven by the nonlending businesses, specifically the technology platform and financial services segments; and second, our financial services segment achieved positive contribution profit for the first time…”
Overall, the company’s Q3 loss per share came in at 3 cents, versus analysts’ mean estimate of a loss per share of 8 cents, while it generated revenue of $531 million, well above analysts’ mean outlook of $511 million.
Analysts’ Views of SOFI Stock
“We view the updated guide as an incremental positive and SOFI remains on track for… profitability within the year,” wrote investment bank Jefferies in the wake of SoFi’s results and guidance.
Heading into the print, JPMorgan correctly predicted that the firm would report good Q3 results and also accurately forecasted that SOFI stock would rally on its results.
On the date of publication, Larry Ramer did not hold (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.
