Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of FinVolution Group Are Dipping Today

By Bram Berkowitz – Mar 12, 2021 at 11:14AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company saw shares rise significantly yesterday and got an upgrade from an analyst today, but may be taking a breather.

What happened

Shares of the Chinese fintech company FinVolution Group (FINV 0.17%) were trading more than 11% down midmorning after a big day of gains yesterday. An analyst from Citigroup also upgraded the company's stock today.

So what

FinVolution, a fintech platform in China that connects borrowers with financial institutions, reported its fourth-quarter and full-year results from 2020 yesterday.

The company reported the equivalent of $284 million of revenue and $76.2 million in net income in the fourth quarter of 2020, both up significantly from the fourth quarter of 2019.

Line with arrow moving downward.

Image source: Getty Images.

For the full year, FinVolution reported the equivalent of nearly $1.2 billion in revenue, up nearly 27% from 2019, and net income of more than $301 million, down 17% from 2019.

This morning, Citigroup analyst Daphne Poon upgraded the company from a neutral to a buy rating and also increased her price target from $5.72 to $7 per share.

Now what

FinVolution saw its stock price climb roughly 93% yesterday and currently trades at $8.68 per share, well above Poon's price target.

The company has given guidance projecting loan volume in 2021 to significantly exceed loan growth in 2020, so FinVolution looks to be in good shape, but it may have overheated a little bit yesterday.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.