LendingClub (LC) AI Stock Analysis

Compare

1,161 Followers

LC Dividends

Top Page

LendingClub

(NYSE:LC)

54Neutral

LendingClub's overall score reflects financial and operational challenges, including declining revenues and negative cash flows, despite a stable balance sheet. The technical outlook is weak, with bearish trends and momentum indicators. Valuation is moderate, offering limited appeal. Recent earnings call insights show positive strategic developments but are offset by increased expenses and provisions. The company needs to improve operational efficiency and cash flow to enhance its financial standing.

Positive Factors

Financial Performance

Lending Club reported a strong quarter which built on the inflection noted during last quarter's earnings, and provided a positive guidance for 4Q and beyond.

Growth Potential

Analysts maintain a Buy rating on Lending Club shares, viewing them as undervalued with significant growth potential.

Strategic Initiatives

LendingClub outlined several programs that will likely step-function growth higher, including receiving investment grade ratings on the senior notes of its structured certificates.

Negative Factors

Expenses

1Q25 guidance is lower than expected due to higher marketing expenses.

Guidance and Expectations

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

$1.08B

Dividend YieldN/A

Average Volume (3M)1.40M

Price to Earnings (P/E)20.9

Beta (1Y)1.86

Revenue Growth3.63%

EPS Growth27.77%

CountryUS

Employees1,002

SectorFinancial

Sector Strength77

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.45

Shares Outstanding114,199,830

10 Day Avg. Volume1,345,782

30 Day Avg. Volume1,402,479

Financial Highlights & Ratios

PEG Ratio0.75

Price to Book (P/B)N/A

Price to Sales (P/S)4.29

Price to Cash Flow (P/CF)-1.70

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

$17.83

Price Target Upside92.76% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

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 is facing financial challenges as reflected by declining revenues, negative profitability margins, and significant cash flow issues. The balance sheet remains relatively stable with low debt levels, but liquidity remains a concern due to negative operating cash flows. The company needs to focus on improving operational efficiencies and cash flow generation to enhance financial stability.

Income Statement

Neutral

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.

Balance Sheet

Neutral

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
-127.43M	59.19M	153.04M	18.44M	-187.62M
	EBITDA
0.00	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
3.47B	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
-15.52M	-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

Technical Analysis Sentiment

Negative

Last Price9.25

Price Trends

50DMA

11.24

Negative

100DMA

13.63

Negative

200DMA

12.73

Negative

Market Momentum

MACD

-0.60

Negative

RSI

39.69

Neutral

STOCH

64.85

Neutral

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 9.25 is below the 20-day moving average (MA) of 9.89, below the 50-day MA of 11.24, and below the 200-day MA of 12.73, indicating a bearish trend. The MACD of -0.60 indicates Negative momentum. The RSI at 39.69 is Neutral, neither overbought nor oversold. The STOCH value of 64.85 is Neutral, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YRD	84 Outperform	$495.53M	2.26	17.96%	3.16%	17.07%	-8.81%
SEZL	74 Outperform	$1.52B	20.53	142.86%	―	70.14%	1359.37%
SOFI	66 Neutral	$12.12B	28.74	8.26%	―	29.33%	―
OMF	63 Neutral	$5.15B	10.18	15.96%	9.37%	7.96%	-20.11%
Sector *	62 Neutral	$11.85B	9.13	8.11%	79.54%	12.80%	-5.24%
LC	54 Neutral	$1.08B	20.89	3.96%	―	3.63%	27.77%
UPST	52 Neutral	$3.89B	―	-20.27%	―	24.50%	49.38%

* Financial Sector Average

Performance Comparison

LendingClub

9.25

1.16

14.34%

OMF

OneMain Holdings

43.65

-1.71

-3.77%

YRD

Yiren Digital

5.61

0.81

16.88%

UPST

Upstart Holdings

39.75

17.67

80.03%

SOFI

SoFi Technologies

10.69

3.44

47.45%

SEZL

Sezzle Inc.

38.59

30.37

369.46%

LendingClub Earnings Call Summary

Earnings Call Date: Jan 28, 2025 | % Change Since: -45.04% | Next Earnings Date: Apr 29, 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.