3 Fintech stocks that jumped more than 10% last week


In recent years, the evolution of financial or fintech technology has made banking, investing and financial transactions more convenient and efficient. And the COVID-19 pandemic has accelerated the pace of digitization in the financial sector, ushering in the era of fintech. JPMorgan Chase & Co. (JPM) strategists felt that fintech innovations “True story of COVID-19”, whose emergence is reinforced by increased demand for digital transformation.

China has developed a prototype aimed at eliminating the need for paper money, and the United States should follow suit. In collaboration with MIT, the Federal Reserve Bank of Boston is developing a central bank digital currency prototype. These initiatives bode well for fintech companies.

With continuous innovations and increasing utility, the global fintech market is expected to reach $ 190 billion by 2026, with growth 13.7% CAGR. Therefore, we believe that fintech stocks Upstart Holdings, Inc. (UPST), SoFi Technologies, Inc. (SOFI) and LendingClub Corporation (CL), whose prices have jumped more than 10% over the past week, might be worth adding to your watchlist now.

Upstart Holdings, Inc. (UPST)

UPST operates a cloud-based artificial intelligence (AI) platform that connects individuals, banks and institutional investors looking to increase access to credit and reduce risk and costs. The San Mateo, Calif., Company went public through a traditional IPO process December 16, 2020.

On October 13, UPST partnered with Kentucky-based credit union Abound Credit Union for digital lending. Adding the credit facility to the Upstart referral network could expand UPST’s reach in Kentucky and allow UPST to improve its services.

On October 6, the company announced the launch of its Upstart Auto Retail software, which includes AI-based financing. This new software is expected to provide a superior car buying experience for consumers and dealers alike.

In the fiscal second quarter, ended June 30, UPST’s total revenue increased 1,017.7% year-over-year to $ 193.95 million. His contribution margin increased 20 percentage points from the previous year quarter to 52%. Its adjusted net income was $ 58.49 million, while its adjusted net income per share was $ 0.62, both registering a substantial increase from their negative values ​​a year ago.

A consensus EPS estimate of $ 0.22 for the current quarter (ending December 2021) indicates a 214.3% year-over-year improvement. Likewise, the consensus estimate of revenue of $ 220.58 million for the current quarter reflects a 154.4% increase over the previous year’s quarter. In addition, UPST has an impressive history of surprise earnings; it exceeded consensus EPS estimates in each of the following three quarters.

The stock gained 857.1% year-to-date and 26.3% over the past week to close Friday’s trading session at $ 390.00.

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SoFi Technologies, Inc. (SOFI)

SOFI, based in San Francisco, is a financial company that operates a platform that functions as a financial services provider and provides student loans, personal loans, auto loans, mortgages, and investments to its clients. The company has gone public in a reverse merger with Social Capital Hedosophia Holdings Corp. V June 1, 2021.

On September 29, SOFI increased the size of its public offering of zero percent convertible senior notes due 2026 to $ 1.1 billion. The company intends to use the product for capped call transactions and general business purposes.

SOFI’s adjusted net income increased 74.1% year-on-year to $ 237.22 million in its fiscal second quarter ended June 30. Its adjusted net loan income increased 47% from the same period last year to $ 172.23 million. And its Adjusted EBITDA stood at $ 11.24 million, up sharply from its negative value a year ago.

Analysts expect its EPS to improve 77.6% year-on-year over the next year (FY2022), while a consensus estimate of $ 1.46 billion in revenue for the next year shows a 50.1% year-over-year increase.

SOFI stock gained 28.4% over the past month and 20.3% over the past week to close Friday’s trading session at $ 19.38.

LendingClub Corporation (CL)

LC operates as a bank holding company for LendingClub Bank, providing a range of financial products and services in the United States. In addition, the San Francisco-based company offers commercial, industrial, commercial real estate, small business, and equipment loans.

On September 9, LC extended LCX, its electronic trading platform, to include LCX Link. This expansion of the company’s capabilities is expected to simplify transactions for institutional investors on the platforms. “The efficiency we enable combined with our scale increases accessibility and improves transparency for investors, which ultimately leads to new, more competitive products for our members,” said Clarke Roberts, vice president of market services. at LendingClub.

For its fiscal second quarter, ended June 30, LC’s total net sales increased 406.4% year-over-year to $ 204.38 million. This can be attributed to a 639.8% increase in its non-interest income from the prior year quarter to $ 158.48 million. Its consolidated net income and EPS were $ 9.37 million and $ 0.09, respectively, both significantly higher from their negative values ​​a year ago.

Street’s EPS estimate of $ 0.11 for the current quarter (ending December 2021) reflects a 145.8% improvement over the previous year’s quarter. Likewise, the street revenue estimate of $ 235.72 million indicates an increase of 210.5% year over year. Additionally, LC has beaten consensus EPS estimates in each of the past four quarters.

The stock gained 586.8% over the past year and 11.5% over the past week to close Friday’s trading session at $ 34.20.

UPST shares were trading at $ 373.37 per share on Monday afternoon, down $ 16.63 (-4.26%). Year-to-date, UPST has gained 816.25%, compared to a 20.62% increase for the benchmark S&P 500 over the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. Following…

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