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Lendingclub Corp. (LC)
NYSE:LC
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LendingClub
(NYSE:LC)
54Neutral
Positive Factors
Earnings
1Q25 results beat expectations on revenue and core EPS and were above the guidance range for originations and pre-provision net revenue (PPNR).
Growth Potential
Analysts maintain a Buy rating on Lending Club shares, viewing them as undervalued with significant growth potential.
Strategic 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
Guidance
2Q25 PPNR guidance was lower than forecast due to higher marketing expenses.
Stock Performance
LC shares are down 23% after-market following 1Q25 and 4Q25 guidance that missed origination growth expectations.
Valuation
Valuation target price is lowered to $20 from $28 due to slower near-term growth.
LendingClub (LC) vs. S&P 500 (SPY)
Market Cap
$1.18B
Dividend YieldN/A
Average Volume (3M)1.48M
Price to Earnings (P/E)23.3
Beta (1Y)1.86
Revenue Growth5.72%
EPS Growth31.82%
CountryUS
Employees1,002
SectorFinancial
Sector Strength88
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.44
Shares Outstanding114,199,830
10 Day Avg. Volume1,985,353
30 Day Avg. Volume1,483,626
Financial Highlights & Ratios
PEG Ratio0.73
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.79
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit-34.61
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.33Price Target Upside38.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
LendingClub Business Overview & Revenue Model
Company DescriptionLendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.
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 is facing financial challenges, with declining revenues and negative profitability margins. The balance sheet is stable with low debt, but liquidity remains a concern 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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 252.97M | 864.62M | 1.17B | 802.42M | 304.86M | Gross Profit |
| -27.03M | 9.19M | 1.06B | 751.70M | 256.52M | EBIT |
| 69.76M | 59.19M | 153.04M | 18.44M | -187.62M | EBITDA |
| 123.06M | 107.05M | 218.43M | 0.00 | 0.00 | Net Income Common Stockholders |
| 51.33M | 38.94M | 289.69M | 18.58M | -187.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 954.06M | 2.87B | 1.40B | 950.66M | 667.19M | Total Assets |
| 10.63B | 8.83B | 7.98B | 4.90B | 1.86B | Total Debt |
| 28.50M | 57.22M | 143.42M | 429.99M | 989.11M | Net Debt |
| -925.56M | -1.20B | -913.61M | -257.13M | 464.15M | Total Liabilities |
| 9.29B | 7.58B | 6.82B | 4.05B | 1.14B | Stockholders Equity |
| 1.34B | 1.25B | 1.16B | 850.24M | 724.17M |
| Cash Flow | Free Cash Flow | |||
| -2.69B | -1.20B | 306.09M | 205.46M | 386.88M | Operating Cash Flow |
| -2.63B | -1.14B | 375.57M | 239.87M | 418.03M | Investing Cash Flow |
| 607.81M | 516.70M | -2.81B | -454.41M | 565.77M | Financing Cash Flow |
| 1.71B | 789.57M | 2.80B | 349.64M | -842.44M |
LendingClub Technical Analysis
Neutral
10.33
Price Trends
10.67
Negative
13.11
Negative
12.79
Negative
Market Momentum
-0.07
Negative
50.51
Neutral
47.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LC, the sentiment is Neutral. The current price of 10.33 is above the 20-day moving average (MA) of 9.76, below the 50-day MA of 10.67, and below the 200-day MA of 12.79, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 50.51 is Neutral, neither overbought nor oversold. The STOCH value of 47.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $550.61M | 2.53 | 17.96% | 5.96% | 17.03% | -23.72% | |
74 Outperform | $1.89B | 25.53 | 142.86% | ― | 70.14% | 1359.37% | |
68 Neutral | $5.15B | 10.18 | 17.46% | 8.43% | 9.07% | ― | |
68 Neutral | $14.02B | 30.20 | 7.51% | ― | 21.24% | ― | |
64 Neutral | $12.64B | 9.74 | 8.05% | 17044.60% | 12.66% | -4.62% | |
54 Neutral | $1.18B | 23.26 | 3.86% | ― | 5.72% | 31.82% | |
53 Neutral | $4.76B | ― | -20.27% | ― | 24.50% | 49.38% |
* Financial Sector Average
Performance Comparison
LC
LendingClub
10.33
1.18
12.90%
OMF
OneMain Holdings
49.35
1.42
2.96%
YRD
Yiren Digital
6.38
1.36
27.09%
UPST
Upstart Holdings
50.08
24.33
94.49%
SOFI
SoFi Technologies
12.70
5.54
77.37%
SEZL
Sezzle Inc.
55.73
47.29
560.31%
LendingClub Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -6.18%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
LendingClub's earnings call reflected strong financial performance with growth in loan volumes and net revenue. The company achieved significant milestones, such as an investment-grade rating, and demonstrated improved credit performance. However, concerns remain about increased provisions for credit losses and economic uncertainties affecting future outlooks.Q1-2025 Updates
Positive Updates
Strong Loan Volume Growth
LendingClub generated $2 billion in loan volume, a 21% increase over last year, reflecting demand from borrowers and loan buyers.
Total Net Revenue Increase
Total net revenue grew 20% to $218 million, with pre-provision net revenue increasing 52% year-over-year to $74 million.
Improved Loan Sales Pricing
Loan sales pricing improved for the fifth straight quarter, up over 200 basis points year-over-year.
Investment-Grade Rating Achievement
Secured an investment-grade rating from Fitch for the first-rated certificate deal, closing a $100 million transaction with a top insurance company.
Strong Credit Performance
Year-over-year delinquency and charge-off rates significantly improved, with a disciplined underwriting approach.
High NPS Score
Achieved an extremely high NPS score of 81 points, with 83% of members wanting to do more with LendingClub.
Negative Updates
Increased Provision for Credit Losses
Provision for credit losses increased to $58 million from $32 million in the prior year, due to higher CECL retention and macroeconomic uncertainties.
Lower Servicing Fees
Servicing fees were lower this quarter, primarily due to higher loan prepayments impacting the servicing asset value.
Uncertainty Due to Economic Conditions
Increased qualitative provision for potential unemployment rate rise to 5.3% and economic uncertainty following macroeconomic changes.
Company Guidance
During the LendingClub first quarter 2025 earnings call, the company provided guidance indicating strong performance and optimistic projections. LendingClub reported a 21% increase in loan volume to $2 billion compared to the previous year, and a 20% increase in total net revenue to $218 million. Pre-provision net revenue grew by 52% year-over-year to $74 million. The company also achieved a net interest margin of 6% and improved loan sales pricing by over 200 basis points year-over-year. For the second quarter, LendingClub anticipates originations in the range of $2.1 billion to $2.3 billion and pre-provision net revenue between $70 million and $80 million. The outlook for the fourth quarter aims for continued growth in originations and a strong return on tangible common equity (ROTCE), assuming stable macroeconomic conditions.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.