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Is OPFI's Underwriting Engine the Key Profitability Catalyst?
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Key Takeaways
OppFi Q3 net income soared 136.9% y/y, whereas revenues rose 13.5%, signaling efficiency gains.
OPFI's auto-approval rate hit 79.1%, lifting efficiency and holding total expense growth to just 0.1% y/y.
OppFi's Model 6.1 refit cut net charge-offs and prompted higher full-year adjusted net income and EPS outlook.
OppFi’s (OPFI - Free Report) proprietary AI and machine learning-based automated underwriting engine Model 6 has been the primary engine behind its record financials over the quarters. In the third quarter of 2025, the company registered a 136.9% year-over-year upsurge in its net income, whereas the top line grew 13.5%. This disproportional growth in revenues and profitability hints at operational efficiency.
During the aforementioned quarter, OPFI’s auto-approval rate was at 79.1%, up 3% year over year. The CEO remarked that this rising auto approval rate fueled OppFi’s operational efficiency. It facilitated improving credit quality assessment without human intervention, thus ensuring a meagre 0.1% year over year rise in total expenses. As a result, its adjusted net income surged 82.7%, with adjusted EPS soaring 78.9%.
Recently, the company has made improvements in its legacy credit assessment engine, Model 6, and introduced an iteration, Model 6.1 refit. This pivot was effective, as evidenced by an 11.2% year-over-year dip in net charge-offs as a percentage of total revenues and a 9.5% fall in net charge-offs as a percentage of average receivables for the nine months ended Sept. 30, 2025.
Banking on Model 6.1 refit’s prowess, management decided to raise its full-year adjusted net income guidance to $137-$142 million from the preceding quarter’s $125-$130 million. Similarly, the adjusted EPS outlook was hiked to $1.54-$1.60 from the preceding quarter’s view of $1.39-$1.44. For investors, it is certainly a green flag, making OppFi’s underwriting engine central to its profitability position.
OPFI’s Price Performance, Valuation & Estimates
The OppFi stock gained 24.1% in a year against the 6.2% dip in its industry and the Zacks S&P 500 Composite’s 20.3% rise. The stock has outperformed Evertec’s (EVTC - Free Report) 10.7% dip and Fidelity National Information Services’ (FIS - Free Report) 13.6% drop during the same timeframe.
1-Year Share Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, OPFI trades at a forward 12-month price-to-earnings ratio of 5.98X, lower than Evertec’s and Fidelity National Information Services’ 8X and 10.58X, respectively.
P/E - F12M
Image Source: Zacks Investment Research
OppFi and Evertec have a Value Score of A, whereas Fidelity National Information Services carries a Value Score of B.
The Zacks Consensus Estimate for OppFi’s earnings per share for 2025 and 2026 has been unchanged at $1.57 and $1.71, respectively, over the past 60 days.
Image: Bigstock
Is OPFI's Underwriting Engine the Key Profitability Catalyst?
Key Takeaways
OppFi’s (OPFI - Free Report) proprietary AI and machine learning-based automated underwriting engine Model 6 has been the primary engine behind its record financials over the quarters. In the third quarter of 2025, the company registered a 136.9% year-over-year upsurge in its net income, whereas the top line grew 13.5%. This disproportional growth in revenues and profitability hints at operational efficiency.
During the aforementioned quarter, OPFI’s auto-approval rate was at 79.1%, up 3% year over year. The CEO remarked that this rising auto approval rate fueled OppFi’s operational efficiency. It facilitated improving credit quality assessment without human intervention, thus ensuring a meagre 0.1% year over year rise in total expenses. As a result, its adjusted net income surged 82.7%, with adjusted EPS soaring 78.9%.
Recently, the company has made improvements in its legacy credit assessment engine, Model 6, and introduced an iteration, Model 6.1 refit. This pivot was effective, as evidenced by an 11.2% year-over-year dip in net charge-offs as a percentage of total revenues and a 9.5% fall in net charge-offs as a percentage of average receivables for the nine months ended Sept. 30, 2025.
Banking on Model 6.1 refit’s prowess, management decided to raise its full-year adjusted net income guidance to $137-$142 million from the preceding quarter’s $125-$130 million. Similarly, the adjusted EPS outlook was hiked to $1.54-$1.60 from the preceding quarter’s view of $1.39-$1.44. For investors, it is certainly a green flag, making OppFi’s underwriting engine central to its profitability position.
OPFI’s Price Performance, Valuation & Estimates
The OppFi stock gained 24.1% in a year against the 6.2% dip in its industry and the Zacks S&P 500 Composite’s 20.3% rise. The stock has outperformed Evertec’s (EVTC - Free Report) 10.7% dip and Fidelity National Information Services’ (FIS - Free Report) 13.6% drop during the same timeframe.
1-Year Share Price Performance
From a valuation perspective, OPFI trades at a forward 12-month price-to-earnings ratio of 5.98X, lower than Evertec’s and Fidelity National Information Services’ 8X and 10.58X, respectively.
P/E - F12M
OppFi and Evertec have a Value Score of A, whereas Fidelity National Information Services carries a Value Score of B.
The Zacks Consensus Estimate for OppFi’s earnings per share for 2025 and 2026 has been unchanged at $1.57 and $1.71, respectively, over the past 60 days.
OPFI currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.