Needham upgrades Open Lending on improving auto lending market

Needham analyst Kyle Peterson upgraded Open Lending (LPRO) to Buy from Hold with a $7 price target The firm sees signs of stabilization and modest improvement in the auto lending market. Following channel checks with users of Open Lending’s core product, Needham is “increasingly confident” that there will be an improvement in loan certification volumes as fiscal 2025 progresses, and is less concerned about ongoing negative fair value revisions due to profit share and weak collateral values. The sizable negative profit share charges which have plagued Open Lending over the past several quarters “could be in the rearview mirror which should help fundamentals moving forward,” the analyst tells investors in a research note.