Shares of recent initial public offering (IPO) UP Fintech Holding (NASDAQ:TIGR) -- which bills itself as "a leading online brokerage firm focusing on global Chinese investors" -- are being punished by those investors today. As of 3:40 p.m. EDT, in the closing minutes of trading for the week, UP Fintech shares are down a whopping 16.5% after earnings that looked pretty good on the surface -- but perhaps not good enough.
As UP Fintech reported this morning, fiscal Q1 2019 sales grew 20% year over year, to $9.6 million, "driven by higher financing service fees, interest income and other revenues." Unfortunately, operating costs grew, as well -- and even faster than revenues -- up 36% year over year. According to the company, most of that growth came from a larger payroll "because the number of employees has nearly doubled."
As a result, UP Fintech ended up reporting a $0.06 loss per American Depositary Share for the quarter.
Granted, this loss was still better than the $0.07-per-ADS loss that UP Fintech reported in the year-ago quarter. But it clearly wasn't what investors were expecting to see, not with revenue growing so strongly.
That being said, there's still hope for UP Fintech. At last report, analysts polled by S&P Global Market Intelligence are still expecting 2019 to be the year that UP Fintech turns GAAP-profitable ($0.02 per share). Profits are still expected to grow strongly, growing more than 10 times, to $0.27 in 2020, then growing again to $0.40 per share in 2021.
All UP Fintech needs to do is ... make those numbers.