Key points:
- SoFi Technologies stock has crashed by 44.7% in 2022. What’s next?
- The fintech company recently lowered its revenue and profit expectations.
- Investors have hope if the stock holds above the $8 and $10 levels.
The SoFi Technologies Inc (NASDAQ: SOFI) stock price has crashed by 44.7% in 2022 despite the fintech company achieving multiple significant milestones. As a result, many investors wonder what comes next for the company.
Also read: The Best Financial Stocks To Buy Right Now.
Unfortunately for SOFI investors, there could be more pain ahead as certain factors beyond the company’s scope are set to affect its business prospects significantly for the rest of the year.
SoFi yesterday adjusted its net revenue expectations for the 2022 year to $1.47 billion from the initial figure of $1.57 billion, citing the recent extension of the student loan repayments moratorium by the Biden administration.
The company told investors that it expects the current administration to extend the moratorium for the entire year, given the upcoming mid-term elections. Most administrations tend to avoid policies that could alienate certain voter groups during election years.
Therefore, SOFI shareholders will have to contend with lower expected earnings before interest, taxes, depreciation and amortization (EBITDA) of $100 million compared to the initial estimate of $180 million in adjusted EBITDA.
SoFi told investors that “Management now expects that several factors including the impending fall midterm elections will precipitate a likely seventh extension beyond August 2022 by the administration. Accordingly, management’s updated 2022 guidance assumes that the student loan moratorium will not in fact end during the course of 2022.”
The company is also dealing with several exits from its board, starting with the immediate departure of Clay Wilkes. Clay was the founder of Galileo Financial Technologies, which was acquired by SoFi Technologies in 2020. He had served on SoFi’s board since the takeover.
Other directors leaving the company include Carlos Medeiros and Michel Combes, both of SoftBank Group will be relinquishing their board positions at the next shareholder meeting. However, it is unclear if SoftBank will be replacing the two directors as a leading shareholder.
The road ahead for SoFi stock is full of challenges, as reflected in its daily stock chart below. SoFi shares are trading below the 50-day and 20-day moving average lines, a bearish signal. However, the stock is trading at the $8.00 support level, which could trigger a bounce and a rally higher as investors adjust their expectations of the fintech company.
A move higher would be welcome, but I wait for a break above the $10 level before opening new bullish positions.
*This is not investment advice. Always do your due diligence before making investment decisions.
SoFi Technologies stock price.
Despite multiple milestones, the SoFi Technologies stock price has fallen by 44.66% in 2022. What’s next?
