What Can Investors Learn from SoFi’s Earnings and Risk Factors?

California-based SoFi Technologies (SOFI) provides online financial services including loans, and crypto and stock brokerage. The company is acquiring a national bank as part of its business expansion.

Let’s take a look at the company’s latest financial performance and risk factors.

SoFi’s Q2 Financial Results and 2021 Guidance

The company reported second-quarter adjusted net revenue of $237.2 million, representing an increase of 74% year-over-year and exceeding the high-end of the internal guidance of $220 million. Revenue also surpassed consensus estimates of $231 million.

Adjusted loss per share of $0.48 widened from a loss per share of $0.03 a year ago and missed consensus estimates of a loss per share of $0.04. (See SoFi Technologies stock charts on TipRanks).

For Q3, SoFi anticipates adjusted net revenue of $245 million – $255 million. Consensus estimates call for revenue of $260.25 million. For full-year 2021, the company maintained its previous guidance, calling for adjusted net revenue of $980 million and adjusted EBITDA of $27 million.

Sofi’s Risk Factors

The new TipRanks Risk Factors tool shows 99 risk factors for SoFi. Since December 2020, the company has revised its risk profile to introduce 96 new risk factors.

A newly added risk factor under the Finance and Corporate category cautions investors that SoFi may not achieve profitability in the future considering its history of losses. The company also tells investors that it does not plan to distribute cash dividends for the foreseeable future. Furthermore, SoFi warns that fluctuations in interest rates, especially if rates fall, could negatively affect its SoFi Money product and its financial condition.

Under the Tech and Innovation category, a newly added risk factor tells investors that cyberattacks could adversely impact SoFi’s business, expose it to liability, and harm its reputation.

SoFi’s newly added Legal and Regulatory risk factor tells investors that the company’s acquisition of a national bank could result in it coming under significant additional regulation.

Finance and Corporate is SoFi’s top risk category, accounting for 40% of the total risks. That is below the sector average at 60%. SoFi shares have gained about 10% since the beginning of 2021.

Analysts’ Take

Rosenblatt Securities analyst Sean Horgan recently reiterated a Buy rating on SoFi stock with a price target of $30. Horgan’s price target suggests 118.18% upside potential.

Consensus among analysts is a Moderate Buy based on 2 Buys. The average SoFi Technologies price target of $26.50 implies 92.73% upside potential to current levels.