Fintech Security

What to watch in fintechs’ Q4 earnings

Large neobanks and online lenders will address the financial wellness of consumers, the security of their balance sheets and what they think 2023 will hold for the economy in their fourth-quarter earnings calls, according to analysts.

Fintechs that offer loans, like SoFi, LendingClub and Oportun, had a turbulent year as rising interest rates hindered their ability to sell loans and inflation strained consumer credit, and analysts don’t have an overly optimistic near-term outlook for the companies. However, customer demand for challenger banks should still be strong, especially as fourth-quarter holidays drove travel and spending.

“Frankly, I think there are going to be a lot more challenges than opportunities in the current timeframe, but there’s always some positives,” said Jefferies analyst John Hecht in an interview, speaking of fintechs in general. “New customer aggregation is one positive aspect we’ll be monitoring. And then on top of that, average revenue per customer.”

Keefe, Bruyette & Woods analyst Michael Perito said in an interview that he expects to see a continuation of the main trends from third-quarter earnings, but added that a main focus for investors will be companies’ guidance for 2023 interest rate expectations, growth trajectories and other metric projections.

Here are some of the top trends that analysts said they’ll be watching in fintechs’ fourth-quarter earnings:

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