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NerdWallet released its monthly Financial Resilience Index, which measures how prepared people are for economic shifts. The latest data shows that over 25 percent of Americans do not feel in control of their daily finances just as the Federal Reserve raised interest rates for the first time in three years. This index is part of the company's strategy to establish itself as a primary source of financial advice. While the survey itself does not change the company's financials, it keeps the brand in front of consumers who are looking for help managing their money as borrowing costs go up.
Source: Business Wire
Retail sales in the US climbed more than expected in August, with 12 out of 13 categories showing growth. This suggests that households are still willing to spend on things like back-to-school items even as they pay more for gasoline.
For NerdWallet, a healthy consumer is a good sign. The company makes money by connecting people with financial products like credit cards and personal loans. When people are active in the economy and confident enough to spend, they are more likely to search for the banking and credit tools that NerdWallet provides.
Source: Bloomberg Markets and Finance
Wall Street analysts see a 90 percent chance that the Federal Reserve will raise interest rates tomorrow. When the Fed raises rates, it becomes more expensive for banks to lend money, which often leads them to tighten their standards for credit cards and personal loans.
This matters for NerdWallet because it makes most of its money by connecting people to these financial products. If banks pull back on lending or if consumers stop looking for loans because they cost more, NerdWallet could see less traffic and lower fees from its partners.
Existing home sales fell 2 percent in August compared to July, even though there are more houses on the market than at any point in the last decade. Prices are still rising, with the median home price up about 2 percent from a year ago to roughly $429,000.
This matters for NerdWallet because a slow housing market means fewer people are searching for and comparing mortgages. Since the company earns money by connecting users with lenders, a drop in home-buying activity can weigh on its mortgage business, which is a key part of its long-term growth plan.
Source: CNBC
The producer price index, which measures what businesses pay for goods and services, rose 0.4 percent in August. This was the largest monthly increase in three months, mostly driven by higher energy costs. At the same time, the number of people filing for new unemployment benefits stayed low at 206,000. While these numbers show the economy remains active, they also suggest inflation is not yet fully settled. For NerdWallet, persistent inflation can lead to higher interest rates, which generally makes consumers more cautious about taking out new loans or opening credit cards.
Source: Bloomberg Markets and Finance
Management has a long history of clearing its own bars with small, consistent beats, though a recent miss suggests the business is becoming harder to forecast as the economy shifts.
| Expectation | |
|---|---|
| EPS | $0.35 |
| Revenue | $252M |