Russell 2000 Nears 1-Year Highs

Neobank SoFi Technologies has become extremely popular among retail traders and experienced a massive run so far this year. That strength continued today as the company reported better-than-expected results. Let’s take a look. 👇

Looking at the headline numbers, a $0.06 per share loss on adjusted net revenue of $488.8 million topped the expected ($0.07)and $474 million. New member additions grew by 584,000 to roughly 6,240,000. And new product additions of 847,000 brought the total to 9,401,000. 🏦

The company also highlighted several “financial inflection points” in its consolidated results.

• Adjusted EBITDA exceeded share-based compensation expenses for the second consecutive quarter.
• Financial Services segment contribution loss improved from $24 to $4 million QoQ.
• GAAP net loss was cut in half YoY from $95.8 million to $47.5 million.

SoFi’s CEO Anthony Noto told Barron’s that “…all the pieces have come together in financial results…” during the quarter. Additionally, his tweet below references another major milestone for the company, with more than 50% of revenue growth coming from non-lending segments. 🤩

Interesting $SOFI earnings day fact: Q2'23 marks the first time 50% of our growth in revenue dollars year-over-year was attributable to Technology Platform and Financial Services business segments (our **non-lending** segments).

— Anthony Noto (@anthonynoto) July 31, 2023

Ultimately, the company says it’s on track to achieve positive contribution profit in all three business segments (lending, technology platform, and financial services) by the end of the year. Additionally, it previously guided for 2023 adjusted net revenue of $1.96 billion to $2.02 billion but raised both ends of that range by a marginal $0.01 billion. Analysts expected $1.991 billion. 🔺

Overall, the student loan repayment process restarting and strength in its personal loan business continue to provide a tailwind for the business. Although significant uncertainty remains about the student loan forgiveness program, the company will benefit from payments beginning again and consumers potentially looking to refinance their loans.

Including today’s 20% rally, $SOFI shares are back above their IPO level and nearly 170% off their December lows. With prices now towards the middle of their long-term range, investors will reassess how closely the business’ fundamentals reflect the current stock price. 🕵️

After this earnings report, the stock already received some upgrades from Wall Street. With nine hold and three sell ratings, we’ll see if the squeeze continues in the coming days. 😬

Yum! Brands is making another attempt at breaking through its 2022 highs after eighteen months of consolidation. And traders are wondering whether its earnings report before the bell on Wednesday will be a catalyst for the bulls. 🤔

Competitors like McDonald’s and Restaurant Brands International are also sitting near all-time highs, with the former already reporting and the latter expected on August 8th. As a result, these stocks are on traders’ and investors’ radars.  🧭

Meanwhile, one of the company’s main brands is currently under fire from consumers who feel its advertising has deceived them. H/T to Rob Freund on Twitter for bringing this false advertising class action lawsuit against the company to our attention. 👀

The entire lawsuit is available here but references pictures of the product advertised vs. what a typical customer allegedly receives. Specifically, part of the lawsuit states that “Taco Bell materially overstates the amount of beef and/or ingredients contained in its advertisements for the Overstated Menu Items by at least double the amount.”

The class action lawsuit is more of a funny aside than a major business catalyst. But overall, the market will be watching Wednesday’s earnings to see if this chart can ultimately break out to new all-time highs. If it does, the next round of tacos is on the bulls! 🌮

The robotics warehouse automation company Symbotic soared over 50% after reporting better-than-expected results. 💪

The supply-chain robotics supplier lost $0.07 per share, more than double its $0.03 loss a year earlier. However, that was better than the $0.08 per share loss anticipated by analysts.

What really got the stock going was its revenues of $311.8 million, which smashed its own guidance and the $261 million consensus estimate. 🤩

The company expects $290 to $310 million in fourth-quarter revenue and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) from $0 to $3 million.

The artificial intelligence (AI) and robotics bull market continues. Traders will be watching $SYM in the coming days as the market digests this quarter. 👀