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Lendingclub Corp. (LC)
NYSE:LC
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LendingClub
(NYSE:LC)53Neutral
Positive Factors
Growth Potential
Lending Club's strong revenue ramp is expected in 2025, emphasized by guidance for significant growth in originations.
Market Positioning
Lending Club's refinancing of credit card debt positions it for strong growth in 2025, given the record $1.3 trillion of credit card debt outstanding.
Negative Factors
Earnings Guidance
1Q25 guidance is lower than expected due to higher marketing expenses.
LendingClub (LC) vs. S&P 500 (SPY)
Market Cap
$1.33B
Dividend YieldN/A
Average Volume (3M)2.26M
Price to Earnings (P/E)25.7
Beta (1Y)1.99
Revenue Growth3.63%
EPS Growth27.77%
CountryUS
Employees1,002
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)0.45
Shares Outstanding113,383,920
10 Day Avg. Volume1,676,512
30 Day Avg. Volume2,261,761
Financial Highlights & Ratios
PEG Ratio0.93
Price to Book (P/B)N/A
Price to Sales (P/S)1.85
Price to Cash Flow (P/CF)-1.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.60Price Target Upside58.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
LendingClub Business Overview & Revenue Model
Company DescriptionLendingClub Corporation (LC) is a financial services company based in the United States that operates primarily in the online lending and banking sectors. Originally founded as a peer-to-peer lending platform, LendingClub has evolved to offer a range of financial products, including personal loans, auto refinancing, and banking services through its acquisition of a digital bank. The company aims to provide affordable credit solutions and competitive banking services while leveraging technology to enhance customer experience.
How the Company Makes MoneyLendingClub makes money primarily through the origination of personal loans and the interest earned on these loans. The company charges origination fees to borrowers at the issuance of a loan, which constitutes a significant portion of its revenue. Additionally, with its digital banking services, LendingClub earns interest income from deposits and loans, as well as service fees. The acquisition of a digital bank has allowed LendingClub to enhance its earnings through interest spread, which is the difference between the interest it earns on loans and the interest it pays on deposits. This diversified revenue model, encompassing both lending and banking services, helps LendingClub generate consistent income while expanding its financial product offerings.
LendingClub Financial Statement Overview
Summary
LendingClub faces financial challenges with declining revenues, negative profitability margins, and cash flow issues. Despite a strong cash position and favorable debt levels, liquidity concerns persist due to negative operating cash flows.Income Statement
LendingClub's revenue has shown significant volatility, with a steep decline from 2022 to 2024. The gross profit margin turned negative in 2024, reflecting increased cost pressures. Despite a positive net income in 2023 and 2024, the net profit margin remains low, highlighting profitability challenges. EBIT margin turned negative, indicating operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet shows a strong cash position relative to debt. The debt-to-equity ratio is favorable, with zero debt reported in 2024, indicating low financial leverage. However, the equity ratio suggests moderate utilization of equity financing. Return on equity has fluctuated, reflecting inconsistent profitability.60
Neutral
Cash Flow
LendingClub's cash flow analysis reveals a significant negative operating cash flow in recent years, indicating liquidity concerns. The free cash flow has deteriorated significantly, highlighting challenges in generating cash from operations. The operating cash flow to net income ratio is negative, suggesting inefficiencies in cash generation relative to income.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.11B | 252.97M | 864.62M | 1.17B | 802.42M | 304.86M | Gross Profit |
| 1.05B | -27.03M | 9.19M | 1.06B | 751.70M | 256.52M | EBIT |
| 154.67M | -127.43M | 59.19M | 153.04M | 18.44M | -187.62M | EBITDA |
| 183.46M | 0.00 | 107.05M | 218.43M | 0.00 | 0.00 | Net Income Common Stockholders |
| 279.19M | 51.33M | 38.94M | 289.69M | 18.58M | -187.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.47B | 3.47B | 2.87B | 1.40B | 950.66M | 667.19M | Total Assets |
| 10.63B | 10.63B | 8.83B | 7.98B | 4.90B | 1.86B | Total Debt |
| 28.50M | 28.50M | 57.22M | 143.42M | 429.99M | 989.11M | Net Debt |
| -15.52M | -15.52M | -1.20B | -913.61M | -257.13M | 464.15M | Total Liabilities |
| 9.29B | 9.29B | 7.58B | 6.82B | 4.05B | 1.14B | Stockholders Equity |
| 1.34B | 1.34B | 1.25B | 1.16B | 850.24M | 724.17M |
| Cash Flow | Free Cash Flow | ||||
| 382.42M | -2.69B | -1.20B | 306.09M | 205.46M | 386.88M | Operating Cash Flow |
| 439.20M | -2.63B | -1.14B | 375.57M | 239.87M | 418.03M | Investing Cash Flow |
| -1.54B | 607.81M | 516.70M | -2.81B | -454.41M | 565.77M | Financing Cash Flow |
| 1.51B | 1.71B | 789.57M | 2.80B | 349.64M | -842.44M |
LendingClub Technical Analysis
Negative
11.71
Price Trends
14.91
Negative
14.83
Negative
12.45
Negative
Market Momentum
-0.76
Positive
31.70
Neutral
19.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LC, the sentiment is Negative. The current price of 11.71 is below the 20-day moving average (MA) of 13.12, below the 50-day MA of 14.91, and below the 200-day MA of 12.45, indicating a bearish trend. The MACD of -0.76 indicates Positive momentum. The RSI at 31.70 is Neutral, neither overbought nor oversold. The STOCH value of 19.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LC.
LendingClub Risk Analysis
LendingClub disclosed 54 risk factors in its most recent earnings report. LendingClub reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LendingClub Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $36.82B | 13.06 | 13.62% | ― | 10.06% | 38060.98% | |
73 Outperform | $66.75B | 16.88 | 20.31% | ― | 7.10% | 4.45% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $5.78B | ― | -20.31% | ― | 24.50% | 49.38% | |
64 Neutral | $14.35B | 34.26 | 7.64% | ― | 29.33% | ― | |
53 Neutral | $1.33B | 25.75 | 3.83% | ― | 3.63% | 27.77% | |
37 Underperform | $6.43B | ― | -70.08% | ― | 35.71% | 8.24% |
* Financial Sector Average
Performance Comparison
LC
LendingClub
11.71
3.73
46.74%
PYPL
PayPal Holdings
67.48
9.36
16.10%
XYZ
Block
59.43
-16.10
-21.32%
LCID
Lucid Group
2.10
-1.09
-34.17%
UPST
Upstart Holdings
59.26
33.27
128.01%
SOFI
SoFi Technologies
13.09
5.69
76.89%
LendingClub Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -30.42% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
LendingClub demonstrated strong growth in originations, deposit expansion, and marketplace demand while successfully exiting its bank operating agreement. However, increased provisions for credit losses and higher non-interest expenses present challenges. The sentiment leans positive due to significant achievements and strategic advancements despite some financial headwinds.Highlights
Strong Year-Over-Year Growth in Key Metrics
Originations increased by 13% year-over-year, pre-provision net revenue rose by 34%, and total net revenue climbed 17% to $217 million.
Successful Exit from Bank Operating Agreement
LendingClub became one of the first fintech banks to successfully exit its new bank operating agreement on time.
Deposit Base Expansion
Deposits grew by 24%, supported by the launch of the LevelUp Savings product.
Marketplace Demand and Loan Sales Prices
Four consecutive quarters of increasing loan sales prices, up by 170 basis points year-over-year, with banks purchasing roughly one-third of volume in Q4.
Launch of Innovative Products
Products like TopUp and DebtIQ have shown significant engagement and increased issuance, contributing to the company's competitive edge and marketing efficiency.
Lowlights
Increased Provision for Credit Losses
Provision for credit losses rose to $63 million from $42 million in the same quarter of the prior year due to higher day-one CECL and additional reserves.
Higher Non-Interest Expenses
Non-interest expenses increased to $143 million due to a $4.4 million pre-tax impairment of internally developed software following the Tally Technology purchase.
Flat Origination Volume Guidance for Q1 2025
Guidance for Q1 2025 originations is $1.8 billion to $1.9 billion, showing no significant growth quarter-over-quarter.
Company Guidance
During the LendingClub Q4 2024 earnings call, the company provided guidance for the upcoming year, highlighting several key metrics and strategic initiatives. For Q1 2025, LendingClub anticipates originations between $1.8 billion and $1.9 billion, marking a 12% year-over-year increase. The company plans to exit Q4 2025 with originations at or above $2.3 billion, representing a 25% growth from current levels. Pre-provision net revenue (PPNR) is expected to range between $60 million and $70 million in Q1, with the company aiming for an 8% return on tangible common equity (ROTCE) by Q4 2025. The guidance assumes stable employment, inflation, and one Federal Reserve rate cut in the second half of the year. Additionally, LendingClub is focused on improving loan sales pricing, expanding marketing channels, and enhancing its mobile app to drive growth and engagement.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.