SoFi Technologies stock drops after Upstart tumbles post Q1 results (NASDAQ:SOFI)

SoFi Technologies Acquires Technisys SA For $1.1 Billion

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SoFi Technologies (NASDAQ: SOFI) stock is sliding 11% in Tuesday morning trading, ahead of its Q1 earnings release, after fintech Upstart Holdings (UPST) warned that Q2 and FY2022 will be worse than Wall Street was expecting. Upstart stock has lost more than half its value since the session’s open.

While the two companies have very different businesses, both position themselves as fintechs and both rely on lending conditions. SoFi (SOFI) is a personal finance app that helps users refinance student debt, save and invest, and Upstart (UPST) provides an artificial-intelligence-driven platform to banks for making lending decisions.

For Upstart (UPST), analysts saw the company’s move to keep some loans temporarily on its balance sheet as a sign of tightening in the credit markets that could lead to lower credit quality.

Affirm Holdings (AFRM) is also feeling the effects of developments at Upstart (UPST). The Buy Now, Pay Later financing provider was downgraded by Stephens because “we think the read-through is negative for capital-markets reliant fintechs,” analyst Vincent Caintic said in a note.

Recall that early in Q2, SoFi (SOFI) cut its guidance after the US government extended its payment pause for federal student loans.

The company is set to release its Q1 results after the close of the market Tuesday. The Wall Street consensus is for Q1 EPS of -$0.13 and revenue of $284.0M

Earlier: Will the recent slash in SoFi’s FY22 guidance impact the stock’s performance after Q1 earnings?

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