Shares of LendingClub Corporation (LC - Free Report) have jumped 23.4% since the release of its first-quarter 2018 results. Adjusted earnings per share of 1 cent beat the Zacks Consensus Estimate of breakeven. Also, the figure compares favorably with the prior-year quarter’s loss of 2 cents.
The results primarily benefited from higher revenues and rise in loan originations. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) showed impressive growth. However, a decline in loan balance and an increase in operating expenses were the major headwinds.
After taking in to consideration several significant items, consolidated net loss was $31.2 million compared with net loss of $29.8 million in the year-ago quarter.
Revenues & Costs Rise
Total net revenues grew 21.8% year over year to $151.7 million. The rise was primarily due to higher volume of loan originations. However, the figure lagged the Zacks Consensus Estimate of $155 million.
Total operating expenses were $182.8 million, up 18.4% from the prior-year quarter. The increase was primarily due to regulatory litigation expenses.
Adjusted EBITDA totaled $15.3 million, up significantly from 0.1 million in the prior-year quarter.
In the reported quarter, loan originations were $2.31 billion, up 17.7% from the year-ago quarter.
As of Mar 31, 2018, cash and cash equivalents were $405.1 million, up nearly 1% from the prior quarter. Loans held for investment were down 10.1% sequentially to $2.6 billion. Total stockholders' equity was $915.1 million, down 1.4% from the Dec 31, 2017 level.
Guidance
Concurrent with the results, management provided guidance for second-quarter 2018 and full-year 2018.
Second-quarter 2018
- Total net revenues in the range of $162-$172 million
- Adjusted EBITDA in the range of $12-$22 million
- Stock-based compensation of nearly $20 million
- Depreciation and amortization and other net adjustments of roughly $12 million
- Net loss in the range of $10-$20 million
Full-Year 2018
- Total net revenues in the range of $680-$705 million
- Adjusted EBITDA in the range of $75-$90 million
- Stock-based compensation of nearly $77 million
- Depreciation and amortization and other net adjustments of roughly $51 million
- Net loss in the range of $55-$70 million
Our Viewpoint
LendingClub’s revenue growth is commendable on the back of strong loans originations. Also, rising adjusted EBITDA is impressive. However, declining loan balance is a headwind. Also, its exposure to numerous legal hassles will keep expenses elevated in the near term.
Currently, LendingClub carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Stocks in the Same Space
CIT Group Inc.’s first-quarter 2018 adjusted earnings from continuing operations of 74 cents per share lagged the Zacks Consensus Estimate of 96 cents. Results were adversely impacted by a decline in net interest revenues and higher provision for credit losses. These were partly offset by lower expenses, a rise in non-interest income and a strong balance sheet.
Moody's Corporation (MCO - Free Report) reported first-quarter 2018 adjusted earnings of $2.02 per share, which handily surpassed the Zacks Consensus Estimate of $1.78. Results were attributable to impressive revenue growth, reflecting strong issuance in the quarter. However, higher expenses were on the downside.
MoneyGram International Inc. reported first-quarter 2018 earnings of 9 cents per share, missing the Zacks Consensus Estimate by 52.6%. Results were affected by the impact of the newly implemented, industry-leading compliance standards, along with ongoing geopolitical challenges in certain markets.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Shares of LendingClub Corporation (LC - Free Report) have jumped 23.4% since the release of its first-quarter 2018 results. Adjusted earnings per share of 1 cent beat the Zacks Consensus Estimate of breakeven. Also, the figure compares favorably with the prior-year quarter’s loss of 2 cents.
The results primarily benefited from higher revenues and rise in loan originations. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) showed impressive growth. However, a decline in loan balance and an increase in operating expenses were the major headwinds.
After taking in to consideration several significant items, consolidated net loss was $31.2 million compared with net loss of $29.8 million in the year-ago quarter.
Revenues & Costs Rise
Total net revenues grew 21.8% year over year to $151.7 million. The rise was primarily due to higher volume of loan originations. However, the figure lagged the Zacks Consensus Estimate of $155 million.
Total operating expenses were $182.8 million, up 18.4% from the prior-year quarter. The increase was primarily due to regulatory litigation expenses.
Adjusted EBITDA totaled $15.3 million, up significantly from 0.1 million in the prior-year quarter.
In the reported quarter, loan originations were $2.31 billion, up 17.7% from the year-ago quarter.
As of Mar 31, 2018, cash and cash equivalents were $405.1 million, up nearly 1% from the prior quarter. Loans held for investment were down 10.1% sequentially to $2.6 billion. Total stockholders' equity was $915.1 million, down 1.4% from the Dec 31, 2017 level.
Guidance
Concurrent with the results, management provided guidance for second-quarter 2018 and full-year 2018.
Second-quarter 2018
Full-Year 2018
Our Viewpoint
LendingClub’s revenue growth is commendable on the back of strong loans originations. Also, rising adjusted EBITDA is impressive. However, declining loan balance is a headwind. Also, its exposure to numerous legal hassles will keep expenses elevated in the near term.
Currently, LendingClub carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Stocks in the Same Space
CIT Group Inc.’s first-quarter 2018 adjusted earnings from continuing operations of 74 cents per share lagged the Zacks Consensus Estimate of 96 cents. Results were adversely impacted by a decline in net interest revenues and higher provision for credit losses. These were partly offset by lower expenses, a rise in non-interest income and a strong balance sheet.
Moody's Corporation (MCO - Free Report) reported first-quarter 2018 adjusted earnings of $2.02 per share, which handily surpassed the Zacks Consensus Estimate of $1.78. Results were attributable to impressive revenue growth, reflecting strong issuance in the quarter. However, higher expenses were on the downside.
MoneyGram International Inc. reported first-quarter 2018 earnings of 9 cents per share, missing the Zacks Consensus Estimate by 52.6%. Results were affected by the impact of the newly implemented, industry-leading compliance standards, along with ongoing geopolitical challenges in certain markets.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on MCO - FREE
Get the latest research report on LC - FREE