The fintech is set to drop its third-quarter earnings on Monday before the market opens. Investors will be looking for signs that SoFi has what it takes to carve a space in this competitive industry now that a pandemic-related challenge to the business has passed.
read more The repayment pause was lifted at the beginning of October, while SoFi’s third quarter ended Sept. 30, but analysts say the company may already be benefiting. Analysts surveyed by FactSet have penciled in $651.5 million in third-quarter student-loan origination volume, soaring past both the $395.4 million recorded the prior quarter and the $457.2 million in the year-earlier quarter.
Analysts are estimating $3.61 billion in third-quarter personal loan originations and $245.3 million in home loans, compared with $3.74 billion and $243.1 million notched in the second quarter, respectively. With a market capitalization of $6.6 billion, SoFi is dwarfed by companies like JP Morgan Chase , Bank of America , and Wells Fargo . They boast market caps of about $409 billion, $208 billion, and $145 billion, respectively.
Focusing on relatively wealthy people may reduce credit losses because such clients have more in their wallets, but it could also limit the market SoFi can address. That might eventually make it harder to snap up new customers, a critical driver of growth and profitability for banks. Overall, however, analysts are less upbeat on SoFi this year. Only 32% rate it at Buy, compared with 56% in April, according to FactSet.