BTIG analyst Lance Jessurun kicked off coverage of several fintech companies with a decidedly bullish perspective on the following names:
- PayPal Holdings (NASDAQ:PYPL)
- SoFi Technologies (NASDAQ:SOFI)
- Upstart Holdings (NASDAQ:UPST)
- Jack Henry & Associates (NASDAQ:JKHY)
- Oportun Financial (NASDAQ:OPRT)
On the other end of the spectrum, Neutral ratings were handed out to:
- Open Lending (NASDAQ:LPRO)
- Block (NYSE:SQ)
- Green Dot (NYSE:GDOT)
- Marqeta (NASDAQ:MQ)
In a note to clients, Jessurun expressed his inclination toward companies tied to recurring IT spend while voicing caution around those linked to consumer discretionary spend. Jessurun paints a particularly bright future for SoFi (SOFI), noting its strong and diversified revenues, quick deposit growth, and high member uptake of new products as factors that set it up nicely for success amid a potentially bleak consumer financial spending forecast. He also points to the potential end of the federal student loan payment freeze as a trigger that could give the stock price a lift.
Affirm (NASDAQ:AFRM) was the sole recipient of a Sell rating. Affirm’s dip in shares by 4% can be attributed to its exposure to discretionary spending and expenses growing faster than revenues. Jessurun flagged concerns over the company’s business model, with increasing rates affecting funding costs and gain on sale premiums. As a result, both variable and fixed expenses are outpacing revenue growth.
Not surprisingly, SOFI is today’s best-performing fintech stock out of the bunch at the time of writing, as it’s up over 5%. Meanwhile, AFRM is the laggard after falling over 10%. Interestingly, though, analyst consensus expects the most from PYPL, which has an upside potential of nearly 43%, and the least from UPST, assigning a downside potential of 58%.
