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LendingClub (LC) Q4 Earnings Beat Estimates, Expenses Down
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LendingClub Corporation (LC - Free Report) reported fourth-quarter 2018 adjusted earnings of 3 cents per share, surpassing the Zacks Consensus Estimate of 2 cents. Notably, the figure excludes certain non-recurring items along with stock-based compensation expenses.
Results reflected growth in revenues, driven by higher volume of loan originations. Moreover, a decline in expenses supported results to some extent. However, lower loan balances along with fall in cash and cash equivalents were headwinds for the company.
After taking into consideration non-recurring items, consolidated net loss was $13.4 million compared with net loss of $92.1 million reported in the year-ago quarter.
Revenues Improve & Costs Decline
Total net revenues grew 16.0% year over year to $181.5 million. The increase was driven by higher volume of loan originations. However, the reported figure marginally lagged the Zacks Consensus Estimate of $181.8 million.
Total operating expenses were $194.9 million, decreasing 21.4% from the prior-year quarter. The decline was due to the absence of class action and regulatory litigation expenses.
Adjusted EBITDA totaled $28.5 million, up 49.4% from the prior-year quarter.
In the reported quarter, loan originations were $2.9 billion, up 17.8% from the year-ago quarter.
As of Dec 31, 2018, cash and cash equivalents were $373 million, down 7.2% from the Dec 31, 2017 level. Loans held for investment at fair value were down 35.8% year over year to $1.9 billion. Total stockholders' equity was $869.2 million, down from $922.5 million recorded as of Dec 31, 2017.
Guidance
Concurrent with the results, management provided guidance for first-quarter and 2019.
First-Quarter 2019
Total net revenues of $162-$172 million
Adjusted EBITDA of $13-$18 million
Stock-based compensation expenses of nearly $18 million
Depreciation, amortization and other net adjustments of roughly $15 million
GAAP and adjusted net loss of $20-$15 million
Full-Year 2019
Total net revenues of $765-$795 million
Adjusted EBITDA of $115-$135 million
Stock-based compensation expenses of around $81 million
Depreciation, amortization and other net adjustments of roughly $63 million
GAAP and adjusted net loss of $29-$9 million
Bottom Line
LendingClub’s revenue growth is commendable on the back of strong loan originations. Also, rise in adjusted EBITDA is impressive.
Nonetheless, declining loan balance remains a headwind. Further, the company’s exposure to numerous legal hassles might keep expenses elevated in the near term.
LendingClub Corporation Price, Consensus and EPS Surprise
CIT Group reported fourth-quarter 2018 adjusted earnings from continuing operations of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.10. Also, the bottom line came in higher than the prior-year figure of 99 cents.
Moody's Corporation (MCO - Free Report) reported fourth-quarter 2018 adjusted earnings of $1.63 per share, which missed the Zacks Consensus Estimate of $1.71. However, the figure improved 8% from the year-ago quarter.
Hercules Capital, Inc. (HTGC - Free Report) is slated to announce quarterly results tomorrow.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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LendingClub (LC) Q4 Earnings Beat Estimates, Expenses Down
LendingClub Corporation (LC - Free Report) reported fourth-quarter 2018 adjusted earnings of 3 cents per share, surpassing the Zacks Consensus Estimate of 2 cents. Notably, the figure excludes certain non-recurring items along with stock-based compensation expenses.
Results reflected growth in revenues, driven by higher volume of loan originations. Moreover, a decline in expenses supported results to some extent. However, lower loan balances along with fall in cash and cash equivalents were headwinds for the company.
After taking into consideration non-recurring items, consolidated net loss was $13.4 million compared with net loss of $92.1 million reported in the year-ago quarter.
Revenues Improve & Costs Decline
Total net revenues grew 16.0% year over year to $181.5 million. The increase was driven by higher volume of loan originations. However, the reported figure marginally lagged the Zacks Consensus Estimate of $181.8 million.
Total operating expenses were $194.9 million, decreasing 21.4% from the prior-year quarter. The decline was due to the absence of class action and regulatory litigation expenses.
Adjusted EBITDA totaled $28.5 million, up 49.4% from the prior-year quarter.
In the reported quarter, loan originations were $2.9 billion, up 17.8% from the year-ago quarter.
As of Dec 31, 2018, cash and cash equivalents were $373 million, down 7.2% from the Dec 31, 2017 level. Loans held for investment at fair value were down 35.8% year over year to $1.9 billion. Total stockholders' equity was $869.2 million, down from $922.5 million recorded as of Dec 31, 2017.
Guidance
Concurrent with the results, management provided guidance for first-quarter and 2019.
First-Quarter 2019
Full-Year 2019
Bottom Line
LendingClub’s revenue growth is commendable on the back of strong loan originations. Also, rise in adjusted EBITDA is impressive.
Nonetheless, declining loan balance remains a headwind. Further, the company’s exposure to numerous legal hassles might keep expenses elevated in the near term.
LendingClub Corporation Price, Consensus and EPS Surprise
LendingClub Corporation Price, Consensus and EPS Surprise | LendingClub Corporation Quote
LendingClub currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Performance of Other Finance Stocks
CIT Group reported fourth-quarter 2018 adjusted earnings from continuing operations of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.10. Also, the bottom line came in higher than the prior-year figure of 99 cents.
Moody's Corporation (MCO - Free Report) reported fourth-quarter 2018 adjusted earnings of $1.63 per share, which missed the Zacks Consensus Estimate of $1.71. However, the figure improved 8% from the year-ago quarter.
Hercules Capital, Inc. (HTGC - Free Report) is slated to announce quarterly results tomorrow.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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