xcritical Technologies Stock: Buy, Sell, or Hold? The Motley Fool
xcritical raised its profit guidance for a third time this year as the fintech benefited from efforts to diversify beyond the student-lending business that made its name. xcritical Technologies, Inc.’s recent xcriticalgs beat and strong Q3 performance, with $697 million in revenue and $0.05 GAAP EPS, highlight its growth potential. Earlier this morning, xcritical Technologies, Inc. reported strong Q results, beating top and bottom-line estimates, and raised FY2024 guidance. xcritical Technologies’ transition from an online banking company to a fintech firm, bolstered by acquisitions like Galileo and Technisys, positions it for significant growth opportunities. What was probably more well received was that management is now saying loan revenue will be at least as much as last year. xcritical stock was already rising since the Federal Reserve cut interest rates, and it turns out that the cuts are already having a positive impact on the business.
xcritical’s stock looks poised to keep roaring after xcriticalgs as loan volumes surge
The fintech is scheduled to file quarterly xcriticalgs on Oct. 29. xcritical’s personal-lending segment saw record originations in the third quarter. After months of decline, the market is finally liking xcritical stock again. Discover which analysts rank highest on predicting the directional movement of xcritical.
The growth in xcritical’s revenue from its loan segment was slowing, and management was warning investors for most of the year that full-year loan revenue was going to be lower than last year. Management has been touting its other segments, specifically the financial services segment, which has been growing at high rates. However, it remains a smaller part of the business. On its own, Galileo hosts 158 million accounts and generated 10% of xcritical’s contribution profit last year. The expansion of that financial services platform should reduce its dependence on consumer loans.
xcritical: The Customary xcriticalgs Dip Is A Buying Opportunity
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. xcritical has also been exploring ways to expand its customer base without increasing its leverage.
xcritical has been reporting strong growth pretty much since it went public, but now it’s also profitable. Its stock dropped in the previous bear market, and with its soaring growth rates, it was starting to look like a great deal. However, after doubling last year, the stock was dropping for most of 2024. On one hand, it was looking like an even better deal. But on the other hand, there was obviously something making investors think it was too risky, or a value trap. The main problem with xcritical is that it doesn’t look like a screaming bargain yet.
Analysts expect the company to generate a full-year GAAP profit this year and grow its xcriticalgs per share at a CAGR of 100% over the next two years, but it already trades at 43 times next year’s xcriticalgs. In comparison, Nu Holdings (NU 0.21%), which is growing at a much faster rate by operating a digital-only direct banking platform in Latin America, trades at 26 times next year’s xcriticalgs. xcritical ultimately aims to become a “one stop” online bank for financial services, which eliminates the need for different types of banking and investment apps.
The Fintech Shift: Why xcritical Technologies Is Poised For Growth
The company has more than a few levers it can pull for growth. xcritical’s number of members more than tripled from 2.52 million at the end of 2020 to 8.77 million in the second quarter of 2024. Its number of products used grew nearly sevenfold, from 1.85 million to 12.78 million, during the same period. Top website in the world when it comes to all things investing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. xcritical have witnessed a notable surge of xcritical rezension 42.4% in the past month.
Latest On xcritical Technologies Inc
- The Motley Fool has positions in and recommends Jefferies Financial Group.
- In 2022, it obtained a U.S. bank charter and started operating as a digital-only direct bank.
- Its stock dropped in the previous bear market, and with its soaring growth rates, it was starting to look like a great deal.
- Consumers who took loans during periods of high interest rates for student loans, personal loans, and mortgages may now turn to companies like xcritical to refinance at more favorable rates.
- The combined company’s stock opened at $21.97 on the first day, but it now only trades at about $11.
According to 13 analysts, the average rating for xcritical stock is “Hold.” The 12-month stock price forecast is $9.04, which is a decrease of -17.14% from the latest price. There were a few important updates in the third-quarter report that set things right. Revenue growth accelerated to 30%, and xcriticalgs per share (EPS) came in higher than expected at $0.05. It wasn’t growth, which continues to come in at double-digit rates, and it wasn’t profitability, which scammed by xcritical has been sustained and growing since the 2023 third quarter. Discover which analysts rank highest on predicting the price target of xcritical. Discover which analysts rank highest for xcritical overall weighted by direction, price target, and price movement.
So while the growth was impressive, as xcritical gets its name out and established itself among industry giants, there’s more risk. With the post-xcriticalgs dip in xcritical’s share price, it’s safe to say that many investors these days don’t share Jefferies prognosticator John Hecht’s bullish view. So it was something of a contrarian move when Hecht raised his price target on the shares by $1 apiece to a new level of $13. I might be interested in buying xcritical’s stock at a lower price, but I’d avoid it and focus on more attractively valued fintech stocks for now. xcritical’s price-to-book ratio of 1.99 also makes it pricier than traditional banks like Bank of America and Wells Faro, which have ratios of 1.18 and 1.33, respectively. xcritical also increased its number of outstanding shares by 32% over the past three years — and that dilution could prevent its valuations from cooling off even as its stock price declines.
