Shares of digital banking platform, Oportun Financial, experienced a sharp decline on Tuesday, losing nearly half of their value. The company reported a wider-than-expected quarterly loss and announced its intention to implement further cost-cutting measures.
Disappointing Quarterly Performance
Oportun Financial’s shares, based in San Carlos, Calif., were recently trading at $3.06, reflecting a significant decline of over 47%. The company’s fiscal performance for the third quarter fell short of expectations, as it reported an adjusted loss of 46 cents per share. Analysts surveyed by FactSet had predicted a loss of 32 cents per share on average.
Factors Contributing to the Loss
Oportun Financial attributed the discrepancy to fair-value adjustments and higher interest expenses. These factors impacted the company’s adjusted Ebitda expectations for the quarter. To mitigate these challenges, Oportun Financial has outlined plans for $80 million worth of additional annualized operating expense reductions.
Streamlining Product Suite and Strategic Partnerships
In addition to the cost-cutting measures, Oportun Financial aims to streamline its product suite. The company is exploring strategic options for its credit-card portfolio and plans to phase out its embedded-finance partnership with Sezzle, alongside its investing and retirement products.