Market Overview

LendingClub's Lender Demand Issues Still Persist

LendingClub's Lender Demand Issues Still Persist

LendingClub Corp (NYSE: LC) filed its 10-Q on May 16, including further details regarding the events that led to the resignation of the CEO, as well as details regarding slowing loan growth since the announcement. The 10-Q also included disclosure of additional regulatory and legal risks.

Slowing Lender Demand

Goldman Sachs’ Heath P. Terry maintained a Neutral rating on the company, while lowering the price target from $7.00 to $4.40, “to reflect the slower growth trajectory relative to the comp group and increased uncertainty on investor demand.”

Related Link: Fears Of Lending Club's Regulatory Woes Might Be Felt By Other Social Lending Players

Although Terry expects loan demand to recover over time, investors are likely to require proof of such recovery before the stock multiple reflects it.

According to the 10-Q filing, since the announcement of the resignation of the CEO and internal review on May 9, the company has experienced “a slowdown in a significant amount of investment capital.”

2Q Originations

According to ThinkNum, based on LendingClub’s SEC filings, stand loan originations grew 16 percent year on year in April, while declining 8 percent year on year May-to-date.

The 2016-2018 revenue and EBITDA estimates have been lowered by 8 percent and 34 percent, respectively, on an average, to reflect the slower loan growth during 2016 and the subsequent decline in profitability.

Latest Ratings for LC

Jul 2019MaintainsEqual-Weight
May 2019UpgradesNeutralOutperform
Aug 2018MaintainsNeutralNeutral

View More Analyst Ratings for LC
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Posted-In: Goldman Sachs Heath P. TerryAnalyst Color Price Target Analyst Ratings


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