Light at the end of the tunnel

November 12, 2016

 

Here is our latest update on Lending Club followed by its 3rd Quarter 8K financial report.

Another important quarter has passed, here is the latest financial measurement highlights reported by Lending Club.

Top Line

  • 3Q 2016 total origination is $1,972 mil, +1% compare to 2Q 2016, and -12% compare to 3Q 2015

  • 3Q Revenue is 112.6 mil, +10% compare to 2Q 2016, -2% compared to 3Q 2015

Bottom Line:

  • 3Q 2016 net income (loss) is -$36.5 mil, an improvement from 2Q 2016 of -$81.4 mil, but down from net income of $1 mil for 3Q 2015

Here are the official reports for the 3Q 2016 earning’s report:

http://ir.lendingclub.com/Cache/1001216391.PDF?Y=&O=PDF&D=&fid=1001216391&T=&iid=4213397

 

http://ir.lendingclub.com/Cache/36580407.pdf?IID=4213397&FID=36580407&O=3&OSID=9

 

The main take away is that Lending Club is improving from a few areas in its business operation.

 

First of all, the 3Q loss is less than expected;

Secondly, the loan origination is higher than anticipated;

Thirdly, the newly launch auto financing service will expand Lending Club’s lending market, which is another large market opportunity;

Lastly, some institutional investors are gradually coming back to the platform to invest.

 

On November 7th, 2016, Lending Club announced that National Bank of Canada has approved investing up to $1.3 billion to be deployed on the Lending Club platform over the next twelve months. The investment will be undertaken by Credigy, a U.S. subsidiary of National Bank of Canada, which specializes in consumer finance investment.

 

Given the latest business performance of Lending Club, I am optimistic about the upcoming trend that Lending Club will continue to improve in many areas of its business. Despite other emerging competitors like Marcus of Goldman Sachs, we believe Lending Club can attract more borrowers by focusing on the value proposition it offers to its customers.

 

As far as its stock price is concern, there is also positive sign that the stock is building a base. Technically speaking, the stock has been spending the last 6 months trading between the low of $3.44 to the high of $6.58, the substantial increase in trading volume indicates that shares are changing from weak to strong hands.

 

 

The stock has reached our original target of $6.50 in early September. I still anticipate that the stock can go back to $9.75 to $10 level in the next 6-month time frame should its business continue to improve and able to restore business growth in its loan origination. Giving the Credibly deal and the newly launch of auto financing business, it is in a much better position than 6 months ago. Stock's immediate resistance level is at $8.

 

Stay tuned!

 

Daniel Wu, CEO

Pair Lending, LLC

Elevate Your Wealth

 

Disclosure: I personally own the stock, some of my clients also own the stock. Pair Lending has business relationship with Lending Club.

 

*Disclaimer: This information is for educational purpose only. Securities mentioned here is not for the purpose of recommendation, nor it has considered your individual financial situation.  

- Please consult your investment advisor before investing. This website and blog is a publication of Pair Lending. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.

- All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Information on this website and blog do not involve the rendering of personalized investment advice.

- A professional advisor should be consulted before implementing any of the options presented.

- No content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.Information on this website and blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein.

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