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What's in the Cards for PPDAI Group (PPDF) in Q1 Earnings?

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PPDAI Group Inc. (PPDF - Free Report) is slated to announce first-quarter 2019 results on May 15, before market open. This China-based online consumer finance marketplace’s earnings are expected to grow year over year.

Higher revenues, a slight improvement in loan origination volume and decline in operation expenses supported the company’s fourth-quarter 2018 results, which surpassed the Zacks Consensus Estimate.

The consensus estimate for the to-be-reported quarter’s earnings of 24 cents has remained stable over the past seven days. Earnings estimates suggest a rise of 9.1% from the year-ago quarter reported figure.

PPDAI Group Inc. Sponsored ADR Price and EPS Surprise

 

PPDAI Group Inc. Sponsored ADR Price and EPS Surprise

PPDAI Group Inc. Sponsored ADR price-eps-surprise | PPDAI Group Inc. Sponsored ADR Quote

Factors to Influence Q1 Results

PPDAI Group expects loan origination volumes for the to-be-reported quarter to be in the range of RMB18-RMB19 billion. This is higher than the RMB17.6 billion recorded in the fourth quarter of 2018.

Additionally, the company anticipates institutional funds to facilitate around 30% of loan origination volume during the first quarter.

Therefore, with higher loan origination volume, PPDAI Group’s loan facilitation service fees and post-facilitation service fees might modestly improve in the quarter. Thus, overall revenues are expected to grow while slowdown in the Chinese economy may have a slight adverse impact.

On the cost front, operating expenses will likely remain stable as rise in provisions for doubtful accounts (mainly due to a rise in delinquency rate) is expected be offset by decline in share-based compensation costs.

Earnings Whispers

Here is what our quantitative model predicts:

We cannot conclusively predict an earnings beat for PPDAI Group this time. That’s because it does not have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold).

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for PPDAI Group is 0.00%.

Zacks Rank: PPDAI Group currently has a Zacks Rank #3, which increases the predictive power of the ESP. But we need to have a positive Earnings ESP to be sure of the earnings beat.

Stocks to Consider

AXA Equitable Holdings, Inc. (EQH - Free Report) has been witnessing upward estimate revisions over the past 60 days. Moreover, this Zacks #1 Ranked stock has rallied 2.8% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oaktree Capital Group, LLC (OAK - Free Report) has been witnessing upward estimate revisions over the past 30 days. Additionally, the stock has jumped 22.1% over the past six months. It currently sports a Zacks Rank #1.

Houlihan Lokey, Inc.’s (HLI - Free Report) earnings estimates have remained stable over the past 60 days. Also, the company’s shares have gained nearly 14.6% in six months’ time. At present, it carries a Zacks Rank of 2.

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