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LendingClub (LC) Plunges Despite Lower-than-Expected Q1 Loss
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Shares of LendingClub Corporation (LC - Free Report) plummeted 5.6% following the release of its first-quarter 2017 results on May 4. The company reported loss per share of 7 cents in the quarter, against earnings of 1 cent recorded in the prior-year quarter. The Zacks Consensus Estimate was of a loss of 9 cents.
Results for the reported quarter included several significant items. Including these, net loss on a GAAP basis came in at $29.8 billion as against net income of $4.1 million in the year-ago quarter.
Weak Revenues, Higher Costs Hurt Bottom Line
Total net revenue declined 18% year over year to $124.5 million. The fall was due to a decrease in all revenue components, except investor fees. However, the figure outpaced the Zacks Consensus Estimate of $121 million.
Total operating expenses came in at $154.4 million, an increase of 4.3% from the prior-year quarter. The increase was triggered by a rise in majority of the expense components except sales and marketing expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization totaled $0.2 million compared with $26.3 million in the prior-year quarter.
In the reported quarter, loan originations were $1.96 billion, down 29% from the year-ago quarter.
As of Mar 31, 2017, cash and cash equivalents were $534 million, up 4% from the prior quarter. Loans were down 7% sequentially to $4.03 billion. Total stockholders' equity was $972 million, relatively flat from the Dec 31, 2016 level.
Guidance
Concurrent with the results, management provided guidance for second-quarter and full-year 2017:
Second Quarter 2017
• Total net revenue in the range of $132–$137 million. • Adjusted EBITDA in the range of $(2.5)–$2.5 million. • Net loss in the range of $35–$30 million
Full Year 2017
• Total net revenue in the range of $575–$595 million. • Adjusted earnings before interest, taxes, depreciation, and amortization in the range of $45–$55 million. • Net loss in the range of $77–$67 million.
Our Viewpoint
The results reflect the problems faced by the company during 2016. Moreover, given the lower volume of loans in the reported quarter and dismal outlook for second-quarter 2017, it is expected that the headwinds will continue.
LendingClub Corporation Price, Consensus and EPS Surprise
MoneyGram International Inc. reported earnings of 26 cents per share, surpassing the Zacks Consensus Estimate of 15 cents and increasing 53% year over year. Total revenue of $386.1 million was flat on a reported basis but increased 1% on a constant currency basis year over year. However, it lagged the Zacks Consensus Estimate of $391 million. Top-line growth was dampened by economic and geopolitical challenges in certain markets.
Moody's Corporation (MCO - Free Report) reported first-quarter 2017 adjusted earnings of $1.47 per share, which handily outpaced the Zacks Consensus Estimate of $1.23. Also, the bottom line improved 58.1% from the year-ago quarter.
Upcoming Release
PRA Group, Inc. (PRAA - Free Report) is expected to announce first-quarter results on May 9, 2017.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time. One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
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LendingClub (LC) Plunges Despite Lower-than-Expected Q1 Loss
Shares of LendingClub Corporation (LC - Free Report) plummeted 5.6% following the release of its first-quarter 2017 results on May 4. The company reported loss per share of 7 cents in the quarter, against earnings of 1 cent recorded in the prior-year quarter. The Zacks Consensus Estimate was of a loss of 9 cents.
Results for the reported quarter included several significant items. Including these, net loss on a GAAP basis came in at $29.8 billion as against net income of $4.1 million in the year-ago quarter.
Weak Revenues, Higher Costs Hurt Bottom Line
Total net revenue declined 18% year over year to $124.5 million. The fall was due to a decrease in all revenue components, except investor fees. However, the figure outpaced the Zacks Consensus Estimate of $121 million.
Total operating expenses came in at $154.4 million, an increase of 4.3% from the prior-year quarter. The increase was triggered by a rise in majority of the expense components except sales and marketing expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization totaled $0.2 million compared with $26.3 million in the prior-year quarter.
In the reported quarter, loan originations were $1.96 billion, down 29% from the year-ago quarter.
As of Mar 31, 2017, cash and cash equivalents were $534 million, up 4% from the prior quarter. Loans were down 7% sequentially to $4.03 billion. Total stockholders' equity was $972 million, relatively flat from the Dec 31, 2016 level.
Guidance
Concurrent with the results, management provided guidance for second-quarter and full-year 2017:
Second Quarter 2017
• Total net revenue in the range of $132–$137 million.
• Adjusted EBITDA in the range of $(2.5)–$2.5 million.
• Net loss in the range of $35–$30 million
Full Year 2017
• Total net revenue in the range of $575–$595 million.
• Adjusted earnings before interest, taxes, depreciation, and amortization in the range of $45–$55 million.
• Net loss in the range of $77–$67 million.
Our Viewpoint
The results reflect the problems faced by the company during 2016. Moreover, given the lower volume of loans in the reported quarter and dismal outlook for second-quarter 2017, it is expected that the headwinds will continue.
LendingClub Corporation Price, Consensus and EPS Surprise
LendingClub Corporation Price, Consensus and EPS Surprise | LendingClub Corporation Quote
Currently, LendingClub carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
MoneyGram International Inc. reported earnings of 26 cents per share, surpassing the Zacks Consensus Estimate of 15 cents and increasing 53% year over year. Total revenue of $386.1 million was flat on a reported basis but increased 1% on a constant currency basis year over year. However, it lagged the Zacks Consensus Estimate of $391 million. Top-line growth was dampened by economic and geopolitical challenges in certain markets.
Moody's Corporation (MCO - Free Report) reported first-quarter 2017 adjusted earnings of $1.47 per share, which handily outpaced the Zacks Consensus Estimate of $1.23. Also, the bottom line improved 58.1% from the year-ago quarter.
Upcoming Release
PRA Group, Inc. (PRAA - Free Report) is expected to announce first-quarter results on May 9, 2017.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time. One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>