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What's in the Cards for LendingClub (LC) in Q1 Earnings?
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LendingClub Corporation (LC - Free Report) is slated to announce first-quarter 2018 results on May 8, after the market closes. Its earnings and revenues are projected to grow year over year.
In the last reported quarter, the company’s adjusted earnings lagged the Zacks Consensus Estimate. While the fourth quarter witnessed higher revenues, an increase in expenses was the undermining factor.
Also, LendingClub does not have an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in only one of the trailing four quarters.
Moreover, activities of the company in first-quarter 2018 were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings for the to-be-reported quarter has remained unchanged over the last 30 days. In fact, according to estimates, the company is expected to break even in the quarter, reflecting an improvement of 100% year over year.
The company’s price performance does not seem impressive either. Its shares have lost 25.1% in the past three months against the industry’s growth of 2.8%.
Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to influence Q1 results.
Factors to Impact Q1 Results
LendingClub’s primary source of revenues is transaction fees on loans, which it issues and subsequently lists online for investors to fund. Since loan originations in the first quarter were decent, we expect transaction fees to be positively impacted. Also, the company’s investments in channel diversification and the ability to offer affordable credit to a wide spectrum of borrowers are likely to continue supporting overall revenue growth.
Management projects total net revenues in the first quarter to be $145-$155 million, up from $124.5 million recorded in the prior-year quarter.
Notably, the Zacks Consensus Estimate for sales for the quarter under review is $152.2 million, which reflects growth of 22.3% on a year-over-year basis.
The company incurs significant expenses for selling and marketing its products. For the to-be-reported quarter, LendingClub projects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to be nearly $5-$10 million.
Management expects net loss of $25-$20 million compared with the year-ago loss of $29.8 million.
Earnings Whispers
According to our quantitative model, it cannot be conclusively predicted whether LendingClub will be able to beat the Zacks Consensus Estimate in the first quarter or not. This is because the stock doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for LendingClub is 0.00%.
Zacks Rank: LendingClub currently has a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
Among other stocks, Hercules Capital, Inc.’s (HTGC - Free Report) first-quarter 2018 net investment income of 31 cents per share beat the Zacks Consensus Estimate by a penny. Results reflected higher revenues, growth in investment portfolio and decrease in operating expenses. However, a fall in net asset value was an undermining factor.
Financial Engines, Inc. is slated to release results on May 9 while Corporate Capital Trust, Inc. is slated to report on May 15.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What's in the Cards for LendingClub (LC) in Q1 Earnings?
LendingClub Corporation (LC - Free Report) is slated to announce first-quarter 2018 results on May 8, after the market closes. Its earnings and revenues are projected to grow year over year.
In the last reported quarter, the company’s adjusted earnings lagged the Zacks Consensus Estimate. While the fourth quarter witnessed higher revenues, an increase in expenses was the undermining factor.
Also, LendingClub does not have an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in only one of the trailing four quarters.
LendingClub Corporation Price and EPS Surprise
LendingClub Corporation Price and EPS Surprise | LendingClub Corporation Quote
Moreover, activities of the company in first-quarter 2018 were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings for the to-be-reported quarter has remained unchanged over the last 30 days. In fact, according to estimates, the company is expected to break even in the quarter, reflecting an improvement of 100% year over year.
The company’s price performance does not seem impressive either. Its shares have lost 25.1% in the past three months against the industry’s growth of 2.8%.
Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to influence Q1 results.
Factors to Impact Q1 Results
LendingClub’s primary source of revenues is transaction fees on loans, which it issues and subsequently lists online for investors to fund. Since loan originations in the first quarter were decent, we expect transaction fees to be positively impacted. Also, the company’s investments in channel diversification and the ability to offer affordable credit to a wide spectrum of borrowers are likely to continue supporting overall revenue growth.
Management projects total net revenues in the first quarter to be $145-$155 million, up from $124.5 million recorded in the prior-year quarter.
Notably, the Zacks Consensus Estimate for sales for the quarter under review is $152.2 million, which reflects growth of 22.3% on a year-over-year basis.
The company incurs significant expenses for selling and marketing its products. For the to-be-reported quarter, LendingClub projects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to be nearly $5-$10 million.
Management expects net loss of $25-$20 million compared with the year-ago loss of $29.8 million.
Earnings Whispers
According to our quantitative model, it cannot be conclusively predicted whether LendingClub will be able to beat the Zacks Consensus Estimate in the first quarter or not. This is because the stock doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for LendingClub is 0.00%.
Zacks Rank: LendingClub currently has a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other stocks, Hercules Capital, Inc.’s (HTGC - Free Report) first-quarter 2018 net investment income of 31 cents per share beat the Zacks Consensus Estimate by a penny. Results reflected higher revenues, growth in investment portfolio and decrease in operating expenses. However, a fall in net asset value was an undermining factor.
Financial Engines, Inc. is slated to release results on May 9 while Corporate Capital Trust, Inc. is slated to report on May 15.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>