Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Sunlight Financial Are Falling Today

By Bram Berkowitz – Nov 16, 2021 at 11:26AM

Key Points

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 reported earnings results for the third quarter of 2021.

What happened

Shares of the home improvement and solar lender Sunlight Financial Holdings (SUNL 0.70%) dropped as much as 14% at one point this morning after the company reported earnings results for the third quarter of the year.

So what

Sunlight reported a loss of $0.15 diluted earnings per share on total revenue of $28.6 million. Analysts had projected the company to turn a profit of $0.06 in the quarter.

Person with marker drawing red squiggly line trending downward.

Image source: Getty Images.

Sunlight also reduced its guidance for the full year in relation to total funded loan balances. The company now projects total funded loans to come in between $2.45 billion and $2.55 billion. Last quarter, management had expected that number to be between $2.6 billion and $2.8 billion. All other guidance stayed the same. The company cited the projected reduction in total funded loans to supply chain, labor, and permitting challenges.

In other recent news regarding Sunlight, media outlets reported yesterday that Sunlight has partnered with American Challenger Development in a deal that will allow American Challenger to purchase up to $1.75 billion of loans from the company over the next few years. The stock jumped about 8% on the news yesterday.

Now what

The company has grown very fast on a year-over-year basis and definitely shows promise in an attractive lending segment. But investors will likely want to see Sunlight clear up some of the challenges it's currently facing and resume its fast growth before buying shares.

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.