pennyvestor
7 years ago
Oppenheimer and Maxim Group. Both of these firms reiterated their buy ratings on the stock today with price targets of $6.25 and $8 respectively
LendingClub Corp
California-based LendingClub is an online peer-to-peer lending company. It was actually the first peer-to-peer lender to register its offerings as securities with the Securities and Exchange Commission (SEC), and to offer loan trading on a secondary market. However, LC shares crashed in after-hours trading by over 20% as the company cut back its revenue and profit guidance for the full year. Shares had already dropped by 6.6% during the day on November 7.
The weak guidance comes despite assurances from LC CEO Scott Sanborn in August that the company was โback on the front foot.โ He had told investors to expect revenue of $600 million with net loss of $65 million for the full year. Now however, Sanborn has changed his tune. Investors are now looking at a net loss of about $67m, on about $579m of revenues.
Nonetheless there is still a bright light out there for LC according to Oppenheimer and Maxim Group. Both of these firms reiterated their buy ratings on the stock today with price targets of $6.25 and $8 respectively. Considering the stock is now trading at under $4.5 this suggests big upside potential. Oppenheimerโs Jed Kelly is a five-star analyst with a strong track record on LC stock specifically. He says that shares have been โoversoldโ and calls the issues โtransitoryโ. Plus he notes that the investorโs day next month serves as an immediate catalyst for the stock. On this day, December 7, management will reveal its 2018 guidance and long-term initiatives
โWe believe strong borrower demand (applications +58% y/y) and a wider investor base can support profitable growth in 2018, and at 10x our โ18E EV/EBITDA, valuation is not stretched, in our viewโ says Kelly. Note that he does reduce his price target from $7.50 to $6.25 to account for the lower guidance, but ultimately, he concludes that โthe risk/reward as very compelling at current levels.โ He is hoping that the companyโs differentiated business-model will help it create a โsticker investor baseโ that will help LC โdrive higher profitability to support outer-year multiple expansion.โ
From TipRanks we can see that LC has a cautiously optimistic Moderate Buy analyst consensus rating. This reflects the fact that in the last three months, the stock has received 4 buy ratings and 3 hold ratings from analysts. The average analyst price target of $7.13 now stands at considerable upside of 30% from the current share price
https://www.smarteranalyst.com/2017/11/08/buy-snap-inc-snap-lendingclub-corp-lc-weakness/