Nucor earnings beat by $0.08, revenue fell short of estimates
On Tuesday, Raymond (NSE:RYMD) James reiterated its Outperform rating on Open Lending (NASDAQ:LPRO) with a steady price target of $7.00, despite the company reporting weaker than expected fourth-quarter results. The financial technology company’s earnings were notably impacted by a $81 million profit share revision, which led to negative reported revenue and EBITDA. The stock has fallen over 53% in the past six months, now trading near its 52-week low of $2.70. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 9.42, though it trades at a notably high P/E ratio of 154.
The revision that affected Open Lending’s financial outcomes was attributed to three primary factors. Firstly, a significant depreciation in used car prices from the 2021 and 2022 loan vintages, which now have values considerably lower than the loan balances, accounted for 40% of the revision. Secondly, there was a 20% contribution from increased delinquencies and defaults. Lastly, two other loan cohorts from 2023 and 2024 are underperforming, representing the remaining 40% of the revision. Despite these challenges, InvestingPro data shows the company remains profitable with positive free cash flow, though revenue has declined by nearly 26% over the last twelve months.
In a shift at the executive level, Open Lending announced that its current Chairman of the Board, Jessica Buss, has taken over as CEO effective immediately. Charles Jehl will continue to serve as the interim CFO and a board member. Additionally, the company has appointed Michelle Glasl as the new chief operating officer. These management changes come at a crucial time, with InvestingPro reporting that five analysts have recently revised their earnings expectations downward for the upcoming period. For deeper insights into Open Lending’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Despite the absence of revenue or adjusted EBITDA guidance, management at Open Lending provided guidance for certified loans in the first quarter, projecting a range of 27,000 to 28,000. This forecast is approximately 9% higher than the midpoint of analyst expectations. The company’s leadership changes and loan guidance come at a pivotal moment as it navigates through the challenges presented by the adjustments in its financial reporting. While the stock’s RSI indicates oversold conditions, InvestingPro analysis suggests the company currently trades above its Fair Value, with analyst price targets ranging from $3.70 to $10.00.
In other recent news, Open Lending Corporation reported disappointing fourth-quarter results for 2024, significantly missing analyst expectations for both earnings and revenue. The company posted an adjusted loss per share of $1.21, contrary to the anticipated earnings of $0.02 per share. Revenue came in at -$56.9 million, a stark contrast to the consensus estimate of $24.02 million. This shortfall was largely due to an $81.3 million reduction in estimated profit share revenues, attributed to increased delinquencies and defaults on loans originated between 2021 and 2024. Newly appointed CEO Jessica Buss highlighted the company’s challenges in profit share revenue forecasts and outlined plans to strengthen risk assessment models. Open Lending reported facilitating 26,065 certified loans in Q4, a slight decrease from the previous year. For the full year 2024, the company recorded a net loss of $135.0 million, compared to a net income of $22.1 million in 2023. Looking forward, the company anticipates certifying between 27,000 and 28,000 loans in the first quarter of 2025 but did not provide specific revenue or earnings guidance.
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