The MarketClub Team, Author at INO.com Trader's Blog

Up 66%, Is SOFI Stock Now a Buy?

Posted on February 10, 2023February 9, 2023 by The MarketClub Team

Personal finance fintech company SoFi Technologies, Inc. (SOFI) reported solid fourth-quarter results.

Its loss per share came below analyst estimates, and its revenue beat the consensus estimate by 4.1%. The company’s adjusted net revenue in the fourth quarter came in 4.2% above its guidance range high of $425 million, and its adjusted EBITDA came $23 million above the high-end of its guidance.

SOFI’s CEO Anthony Noto said, “Record revenue across all three of our business segments – Lending, Technology Platform, and Financial. Our continued strong growth and significant improvement in GAAP net income margin position us very well in 2023 for another year of significant revenue and EBITDA growth and for reaching GAAP net income profitability in the fourth quarter.”

SOFI’s solid results could be attributed to its total deposits, which rose 46% sequentially and more than 700% in 2022 to $7.34 billion. The company benefited from the Fed’s aggressive interest rate hikes leading to its rise in net interest income.

The company added 480K members in the fourth quarter. Its total members came in at 5.22 million, rising 51% year-over-year. It added 695K new products in the fourth quarter, bringing total products to 7.89 million in 2022, increasing 53% year-over-year.

Noto said, “Our strong momentum in member and product adds, and the momentum in products added from cross-buy, reflects the benefits of our broad product suite and Financial Services Productivity Loop (FSPL) strategy.”

“Total deposits at SoFi Bank grew 46% sequentially during the fourth quarter to $7.30 billion at year-end, and 88% of SoFi Money deposits are from direct deposit members. We continued to see nearly half of newly funded SoFi Money accounts set up direct deposit by day 30, and average spend in the fourth quarter rose 25% versus the third quarter. As a result of this growth in high-quality deposits, we are benefiting from a lower cost of funding for our loans,” he added.

For the first quarter of fiscal 2023, the company guided its adjusted net revenue between $430 million to $440 million.

In addition, it expects its adjusted EBITDA to come between $40 million to $45 million. In the fourth quarter of fiscal 2023, the company expects positive GAAP net income and a 20% incremental GAAP net income margin for the full year. Continue reading "Up 66%, Is SOFI Stock Now a Buy?" →

What Is A Buyback? 1 Company Buying Back Its Stock in 2023

Posted on February 9, 2023February 8, 2023 by The MarketClub Team

A business with excess cash on its books can return value to shareholders in various ways. One of them is distributing the surplus among shareholders as dividends. However, they are more tax-efficient ways to reward existing shareholders with delayed gratification.

A business can choose to reinvest its earnings into its own business or acquire other businesses to upgrade or expand its operations organically or inorganically to increase its future earnings and consequentially increase the intrinsic value of each of its outstanding shares.

Alternatively, the business may choose to decrease the number of outstanding shares, making each share worth a greater percentage of the corporation. All else being equal, this increases the earnings attributable to each share almost immediately. This method of allocating excess capital is called a buyback.

Buybacks are initiated through tender offers or open market transactions when the management of an organization feels that its shares are undervalued. In addition to signaling financial health and increased confidence in their own prospects, businesses also repurchase their own shares to reduce supply and dilution by shrinking the float to prevent other shareholders from taking a controlling stake.

In a nutshell, a buyback is a way for a business to get its skin deeper in the game with the hope of rewarding investors who choose to keep supporting it.

Can Meta Platforms Be a Good Investment Given Its Buyback Program?

On February 1, Meta Platforms, Inc. (META) announced that it had repurchased $6.91 billion and $27.93 billion of its Class A common stock in the fourth quarter and full year of 2022, respectively.

It also announced a $40 billion increase in its share repurchase authorization, in addition to the $10.87 billion available and authorized for repurchases as of December 31, 2022.

As the parent company of world-renowned social networking platforms, such as Facebook and Instagram, META builds technologies that help people find communities and grow businesses through mobile devices, personal computers, virtual reality (VR) headsets, wearables, and in-home devices. The company operates through two segments: Family of Apps (FoA) and Reality Labs (RL). Continue reading "What Is A Buyback? 1 Company Buying Back Its Stock in 2023" →

1 Tech Stock To Count On In 2023

Posted on February 3, 2023February 2, 2023 by The MarketClub Team

Software giant Oracle Corporation’s (ORCL) second-quarter revenue and EPS exceeded Wall Street’s estimates. The company’s EPS was 3.2% above the consensus estimate, while its revenue beat analyst estimates by 2.1%.

The strength in cloud infrastructure and cloud-based applications drove a solid topline performance.

Its total cloud revenue, including infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS), rose 48% year-over-year in constant currency to $3.80 billion.

IaaS revenue increased 59% year-over-year in constant currency to $1 billion.

Without the impact of the foreign-exchange rates, ORCL’s adjusted EPS would have been 9 cents higher.

ORCL’s CEO, Safra Catz, said, “In Q2, Oracle’s total revenue grew 25% in constant currency-exceeding the high end of our guidance by more than $200 million. That strong overall revenue growth was powered by our infrastructure and applications cloud businesses that grew 59% and 45%, respectively, in constant currency.”

“Fusion Cloud ERP grew 28% in constant currency, NetSuite Cloud ERP grew 29% in constant currency- each and every one of our strategic businesses delivered solid revenue growth in the quarter,” she added.

For fiscal 2023, the company expects its cloud revenue to grow more than 30% in constant currency compared to the 22% growth in fiscal 2022.

ORCL expects its revenue to rise 17% to 19% on a reported basis and 21% and 23% on a constant currency basis in the third quarter. Also, it expects adjusted EPS for the third quarter to be between $1.17 and $1.21, lower than the consensus estimate of $1.24.

ORCL’s stock has gained 13.3% in price over the past three months and 13.6% over the past six months to close the last trading session at $88.46.

The company paid a quarterly dividend of $0.32 on January 24, 2023. Its annual dividend of $1.28 yields 1.45% on the current share price. It has a four-year average yield of 1.59%.

Its dividend payouts have increased at a 10.1% CAGR over the past three years and an 11% CAGR over the past five years. The company has grown its dividend payments for eight consecutive years.

Here’s what could influence ORCL’s performance in the upcoming months:

Steady Topline Growth

ORCL’s total revenues increased 18.5% year-over-year to $12.27 billion for the second quarter that ended November 30, 2022.

The company’s non-GAAP operating income increased 4.8% year-over-year to $5.08 billion. Its non-GAAP net income declined 2% year-over-year to $3.31 billion. Continue reading "1 Tech Stock To Count On In 2023" →

2 FAANG Stocks Staging A Comeback

Posted on February 1, 2023January 31, 2023 by The MarketClub Team

The fabled group of five large-cap tech businesses, so-called FAANG — Facebook (currently Meta Platforms), Amazon, Apple, Netflix, and Google (currently Alphabet) — dominated the stock market through late 2021.

However, a challenging macroeconomic environment in 2022, characterized by stubborn inflation and removal of Covid restrictions, saw big tech struggling to meet and exceed the high expectations of growth in subscribers/users and advertisement revenues set at the height of the pandemic.

The slump in the performance of these tech businesses was soon reflected in the price action of their stocks. Their dismal year can be summarized by the below snapshot at the end of October 2022.

Source: Forbes

However, the drawdown brought the valuations of these compounders to a more comfortable buying point while they did the needful to recapture lost demand and improve the efficiency of their businesses.

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3 Energy Stocks To Load Up On In 2023

Posted on January 24, 2023January 23, 2023 by The MarketClub Team

While it is broadly expected that the pace of interest rate hikes may be dialed down to 25-basis points, concerns over terminal interest rates being higher than expected and its effect on the U.S. economy have kept markets on edge.

With the likely less aggressive but drawn-out interest rate hikes by the Fed expected to add further stress to subdued corporate performance, the stock market volatility is expected to continue in the foreseeable future.

Hence, it could be wise for investors to increase exposure to instruments and assets whose prospects are robust enough to remain relatively unaffected by the turbulence.

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With supply constraints due to turbulent geopolitics and extreme weather events acting to keep demand robust, global energy consumption is expected to grow by 1.3% in 2023 as many countries use fossil fuels to manage their energy transition.

Source: https://www.eia.gov/
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Author: The MarketClub Team