LendingClub (LC) stock is declining as it will scale back loans to riskier borrowers and hike interest rates, and as a major shareholder has sold off its stake.
Why did LendingClub stock fall 14% Wednesday?
Shares of LendingClub Corp. fell 14% in the extended session Wednesday after the company gave 2022 earnings guidance lower than analysts expected. LendingClub LC, +6.03% reported earnings of $29.1 million, or 27 cents a share, in the holiday quarter, swinging from a loss of $27 million, or 29 cents a share, in the year-ago period.
Is LendingClub's stock overreacting?
I've been a big proponent of LendingClub's stock in the past, so I definitely see this as an overreaction from the market. When the company acquired Radius Bank last year, that allowed it to drive more revenue and earnings from its existing business.
Will LendingClub continue to strengthen in 2022?
In spite of the narrative turning negative as of late, LendingClub's fundamentals are poised to continue strengthening in 2022. And since it's a bank, gradually higher interest rates would actually be a positive for this business.
Should investors treat LendingClub like a traditional bank?
Investors seem to want to treat LendingClub like a traditional bank, which I would argue is incorrect. Furthermore, I would contend that even if you do treat it like a traditional bank, a bank generating the kind of returns that LendingClub is should not be trading at less than 12 times projected earnings this year.
Is LendingClub shutting down?
In October 2020, the company ceased all new loan accounts on their website as part of restructuring into a neobank after the acquisition of Radius Bank. As of December 31, 2020, Lending Club will no longer operate as a peer-to-peer lender.
Is LendingClub a good stock?
The digital marketplace bank LendingClub (LC -6.14%) got off to a good start to the year, generating earnings results for the first quarter of 2022 that easily beat analyst estimates.
What happened with LendingClub?
What's happened? Effective December 31, 2020, LendingClub retired the Notes platform. This doesn't affect the existing Notes you own, but the last day to purchase Notes was December 27. In addition, we stopped accepting new accounts effective October 8 and retired the mobile app on November 10.
Is LendingClub profitable?
Achieved GAAP profitability during 2021, with net income of $18.6 million for the year ended December 31, 2021, compared to a net loss of $187.5 million in 2020....LendingClub Reports Fourth Quarter and Full Year 2021 Results.(millions)First Quarter 2022Full Year 2022Total revenue$255M to $265M$1.1B to $1.2BConsolidated net income$25M to $30M$130M to $150MJan 26, 2022
Is Lending Tree a buy?
Lendingtree's analyst rating consensus is a 'Strong Buy. This is based on the ratings of 6 Wall Streets Analysts.
Is LC stock a buy?
The consensus among 5 Wall Street analysts covering (NYSE: LC) stock is to Strong Buy LC stock.
Is LendingClub owned by Wells Fargo?
That's because Lending Club's biggest shareholder, with a 19.5 percent stake as of December 2012, is Norwest Venture Partners, a wholly owned subsidiary of Wells Fargo. Lending Club also does its corporate banking with Wells Fargo. "We are a little puzzled," said Scott Sanborn, Lending Club's chief operating officer.
Does LendingClub still have investors?
Frequently Asked Questions. Can I still invest in LendingClub Notes? Unfortunately, Notes are no longer available for investment. Check back soon on new products LendingClub will offer to individual investors.
What is the difference between lending tree and LendingClub?
How they're different. The main difference is that LendingClub is a peer-to-peer lender, while LendingTree is an online lending marketplace. This means that LendingClub relies on investors to fund your loan while LendingTree can help you prequalify for multiple lenders with one application.
Is LendingClub FDIC insured?
Your deposits are FDIC-insured up to the highest possible amount allowed – $250,000 per depositor for each ownership category.
How much debt does LendingClub have?
For prospective borrowers, you can apply for a personal loan to get an instant rate quote.
Is Lending Club Bank legit?
Yes, LendingClub Bank, National Association is FDIC insured (FDIC# 32551). As an account holder of an FDIC-insured bank, you are protected for up to $250,000 per depositor, for each account ownership category, in the event of a bank failure.
Key Points
While LendingClub beat on earnings and revenue estimates, it issued lower earnings guidance for this year than analysts had been expecting.
NYSE: LC
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What happened
Shares of the digital-marketplace bank LendingClub ( LC 3.99% ) had dropped roughly 26.5% as of 11:41 a.m. ET today after the company reported earnings results for the fourth quarter and full year of 2021.
So what
The company, which is largely in the business of using technology to more efficiently originate unsecured personal loans, reported diluted earnings per share of $0.27 on total revenue of more than $262 million, both of which beat analyst estimates.
Now what
I've been a big proponent of LendingClub's stock in the past, so I definitely see this as an overreaction from the market. When the company acquired Radius Bank last year, that allowed it to drive more revenue and earnings from its existing business.
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Where is Matt from Motley Fool?
Matt is a Certified Financial Planner based in South Carolina who has been writing for The Motley Fool since 2012. Matt specializes in writing about bank stocks, REITs, and personal finance, but he loves any investment at the right price. Follow him on Twitter to keep up with his latest work! Follow @TMFMathGuy
Is lendingclub stock down?
LendingClub's stock has been a major disappointment to investors. It is down by 32% over the past year alone and has declined by a staggering 84% since going public in late 2014.
Key Points
Factors beyond its control account for the recent sell-off, but LendingClub's recovery still looks strong.
NYSE: LC
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What happened
Shares of peer-to-peer lending platform LendingClub ( LC -4.59% ) shot 11.3% higher today as of market close. It was a nice relief rally for shareholders after a tough couple of months. Set off by a coming raise in interest rates this year, the stock has been halved in value from its last peak at the beginning of November 2021.
So what
High-growth fintech stocks have been getting sold off hard as of late. The Federal Reserve has indicated its accommodative monetary policy to keep the economy in recovery mode during the pandemic is going to get rolled back in 2022 perhaps at a faster pace than originally thought. Higher interest rates have been all the talk.
Now what
In spite of the narrative turning negative as of late, LendingClub's fundamentals are poised to continue strengthening in 2022. And since it's a bank, gradually higher interest rates would actually be a positive for this business.
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The price action
For comparison purposes, I will share a 3-month price chart of UPST versus LC:
The fundamentals tell a different narrative
The fundamental picture tells a completely different story. In the last two quarters, LC demonstrated solid profitability on a GAAP basis and reported very strong ROE numbers.
The risks
I see the key risk for LC is an imminent deep recession that will result in significant loan losses materially above its provisions. Even in that scenario, I expect LC to comfortably survive (and then thrive) given its high capital ratios and additional cash buffer at the holding company level.
Final thoughts
The price action tells a very different narrative to the fundamental story.
What happened to lending club after the 2016 scandal?
After the 2016 scandal, LendingClub slowed originations, and aimed more at prime borrowers with tightened underwriting. In addition, LendingClub sought out more stable institutional investors, such as banks, insurance companies, and other professional funds.
How much did lendingclub increase in originations?
Still, LendingClub did, prudently and methodically, increase originations between 2017 and 2019, from $9 billion in originations in 2017 to $12.3 billion in ...
Why did margins increase?
Margins also increased, due to both scale and management efforts to cut costs. The company even reach adjusted net income profitability for the first time in years in the third quarter of 2019. Even after it slowed down originations, LendingClub was still the largest originator of personal loans in the U.S.
Who is the CEO of lending club?
New CEO Scott Sanborn has been transforming the business over the past few years, which may have soured the original investors in LendingClub, without attracting more traditional financial stock investors.
Is lendingclub still a marketplace?
Of course, LendingClub will still be a marketplace, but the ability to hold more loans itself if need be will take care of the funding vulnerability in rough times, and should lead to an extra $40 million in profit for every $1 billion held on its books.
Is lendingclub a game changer?
The acquisition of the bank could be a game changer for LendingClub. It significantly reduces the company's cost to fund its loans by allowing it to use cheap deposits that LendingClub can now hold on its balance sheet. It also allows the company to retain some loans on its balance sheet and make interest income on them.
Does Bram Berkowitz have a position in any of the stocks mentioned?
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Prev. 1. 2.
