Why is SoFi falling in pre-market trading?

SoFi Technologies, Inc. (NASDAQ: SOFI) lowered its full-year 2022 revenue forecast after United States President Joe Biden extended the federal student loan payment suspension date from May 1, 2022 to August 31, 2022.

Shares of the company were down 6.4% in extended trade on Wednesday and a further 5.6% at the time of writing. Perhaps management’s expectations for a new expansion have led to such a pessimistic reaction for the title.

SoFi now expects adjusted net revenue of $1.47 billion in 2022, down from a previous forecast of $1.57 billion. Adjusted EBITDA is expected to be $100 million, compared to previous guidance of $180 million.

The company said its student loan refinancing business has been quite deeply affected by COVID-19, as it has operated at 50% levels for the past two years.

SoFi CEO Anthony Noto said, “SoFi has done an outstanding job of achieving record financial results, member and revenue growth, and consistent profitability, despite the negative impact of the extended loan payment moratorium. students. We will work diligently to continue this trend in 2022.

The Taking of Wall Street

Following the news, Mizuho Securities analyst Dan Dolev maintained a buy rating on SoFi but lowered the price target to $14 from $17. The new price target implies a potential upside of 60% from current levels.

Dolev said, “Many investors think the guide down includes additional weak spots; however, our analysis shows that the slowdown in P&L is solely due to the extension of the moratorium. We don’t see any additional weaknesses.

The consensus among analysts is a moderate buy based on seven buys and six holds. SoFi’s average price target stands at $16.50 and implies an upside potential of 88.6% from current levels.

Website traffic

TipRanks’ website traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s largest website usage monitoring service, provides insight into SOFI’s performance.

According to the tool, the SoFi website saw an 8.1% monthly drop in global visits in February, compared to a year earlier. In addition, traffic to its website has decreased by 1.2% since the beginning of the year compared to the same period last year.

Take away

A drop in traffic to an online personal finance company’s website can only mean one thing: a drop in sales. So, given management’s revised revenue guidance, as well as insights from our website traffic tool, it can be expected that the company’s performance in the upcoming quarterly results will not be impressive.

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