BTIG Weighs LendingClub CFO Exit, Adjusted EBITDA Outlook Against Promising Loan Origination Growth

Mark Palmer of BTIG remains bullish on LendingClub Corp's LC outlook following the company's second quarter results.

In a report published following LendingClub's results, the analyst stated the earnings print served as a "damage assessment for investors" following the recent scandal in which the company's ex-CEO Renaud Laplanche was ousted and management warned its second quarter loan origination would fall by one-third sequentially.

Palmer added that the damage in LendingClub's business was "not as significant as expected" from a loan origination standpoint, there was one "apparent casualty" - the resignation of the company's Chief Financial Officer Carrie Dolan. The analyst suggested that the resignation wasn't a big surprise as she had been a "holdover from the Laplanche regime."

Related Link: Goldman Sachs Expecting A Recovery In LendingClub Loan Demand Over Time

Palmer also discussed LendingClub's loan origination in the quarter, which declined sequentially by a better-than-expected 28.8 percent to $1.955 billion - ahead of his $1.843 billion estimate. The analyst also pointed out that 15 of its top 20 investors have returned to the company's marketplace platform after leaving in May, which adds to the prospects of a promising loan origination outlook.

Moreover, LendingClub's management said its loan origination volume gained in June and the momentum carried over into July.

Finally, the analyst suggested LendingClub's cash balance of $832 million as of June 30 is "more than ample to provide the company with the time it will need to fully regain its footing."

Bottom line, LendingClub's value proposition "remains intact" and the company's fiscal 2019 adjusted EBITDA of $307 million supports the analyst's Buy rating and $9 price target.