Trump announces trade deal with EU following months of negotiations
On Wednesday, BTIG analyst Vincent Caintic adjusted the price target for Lending Club (NYSE:LC) shares, reducing it from $20.00 to $14.00, while still maintaining a Buy rating on the stock. Currently trading at $11.01 with a market capitalization of $1.25 billion, InvestingPro analysis suggests the stock is undervalued relative to its Fair Value. The revision comes with a recalibration of earnings per share (EPS) estimates for the years 2025 and 2026, with the expectation of only marginal quarter-over-quarter growth through most of this period.
Caintic’s report indicated that the primary reason for the adjustment is an increase in quarterly marketing expenditures, which are expected to keep pre-provision net revenue (PPNR) relatively flat. Despite the lowered EPS forecasts and price target, the analyst reaffirmed a Buy rating, expressing continued confidence in Lending Club’s potential to capture market share from the credit card sector as overall industry underwriting tightens. According to InvestingPro data, the company maintains profitability with a P/E ratio of 24.47, though it’s currently experiencing some cash flow challenges. For deeper insights into Lending Club’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The analyst’s outlook for Lending Club remains positive, citing the company as one of the top growth stories within their coverage area. While InvestingPro data indicates a projected revenue decline for the current year, the anticipated higher marketing costs are seen as a strategic investment to fuel significant growth in originations. Projections for originations show a 35% year-over-year increase in 2025, followed by 22% in 2026, and 16% in 2027.
Caintic also projected that by 2027, Lending Club’s EPS could be more than three times that of the expected figures for 2025 and 2026, assuming marketing expenses return to historical norms. Revenue estimates are also optimistic, with a 19% year-over-year growth in 2025, accelerating to 30% in 2026, and 24% in 2027. These growth rates were described as conservative by the analyst.
The valuation rationale provided by Caintic for the new $14.00 price target is based on an 11 times multiple of the projected 2027 EPS of $1.24, which assumes a normalization of expenses to typical margins. Additionally, the target reflects 1.2 times the 2025 tangible book value (TBV).
In other recent news, LendingClub Corp reported its financial results for the first quarter of 2025, showcasing a robust revenue growth of 20% year-over-year, reaching $218 million, which exceeded the forecasted $213.46 million. However, the company’s earnings per share (EPS) fell slightly short of expectations, reporting $0.10 against the anticipated $0.11. Loan originations also saw a significant increase, rising 21% year-over-year to $2 billion. Despite the earnings miss, LendingClub’s strategic initiatives, such as expanding marketing channels and optimizing deposit funding costs, continue to drive growth. The company is also focusing on new market opportunities, including entering the insurance market, as highlighted by CFO Drew LeBen. Analyst firms have noted these developments, with some maintaining a cautious outlook due to macroeconomic uncertainties. Additionally, LendingClub acquired intellectual property and talent from Cushion, an AI-powered spending intelligence app, to enhance its mobile experience. These recent developments reflect the company’s ongoing efforts to navigate challenges while capitalizing on growth opportunities in the financial sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.