Back to top

Image: Bigstock

LendingClub (LC) Surges 8.2%: Is This an Indication of Further Gains?

Read MoreHide Full Article

LendingClub (LC - Free Report) shares ended the last trading session 8.2% higher at $17.91. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 11% gain over the past four weeks.

The upside can be attributed to LendingClub’s competitive strengths in its robust and resilient business model, leveraging two distinct revenue streams: marketplace revenue from loan origination fees and net interest income from loans retained for investment. Its banking capabilities provide a lower-cost, stable funding source compared with non-bank peers while eliminating fees paid to third-party issuers.

The company’s unmatched data and analytics power customer experience and underwriting, with more than 150 billion data points collected, improving risk assessment and cost efficiency. Additionally, LC benefits from a strong, growing customer base, particularly among high-income, high-credit-score consumers, ensuring repeat business and low acquisition costs.

This company that connects borrowers and lenders online is expected to post quarterly earnings of $0.10 per share in its upcoming report, which represents a year-over-year change of +11.1%. Revenues are expected to be $207.41 million, up 11.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For LendingClub, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. 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 >>>>

LendingClub is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, American Express (AXP - Free Report) , finished the last trading session 0.5% higher at $303.57. AXP has returned 5.3% over the past month.

For American Express, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $3.01. This represents a change of +14.9% from what the company reported a year ago. American Express currently has a Zacks Rank of #3 (Hold).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


American Express Company (AXP) - free report >>

LendingClub Corporation (LC) - free report >>

Published in