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LendingClub (LC) Moves 18% Higher: Will This Strength Last?

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LendingClub (LC - Free Report) shares rallied 18% in the last trading session to close at $15.08. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.7% gain over the past four weeks.

LendingClub extended its rally for the fourth consequent day and touched a new 52-week high of $15.36. The primary reason for the rally can be attributed to the news that Cathie Wood’s ARK Fintech Innovation exchange-traded fund purchased nearly 228,500 shares of the company. Also, better-than-expected revenues and loan origination guidance (released on Mar 10) for the first quarter and full year 2021 drove the shares up.

Price and Consensus

Price Consensus Chart for LendingClub

This company that connects borrowers and lenders online is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of +70.5%. Revenues are expected to be $83.6 million, down 30.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For LendingClub, the consensus EPS estimate for the quarter has been revised 20.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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