Should You Join The Lending Club Bulls Ahead Of Q3 Earnings?

LendingClub Corp LC, an online marketplace that connects borrowers and investors, has seen its share of controversy over the years. After a management shuffle which saw the ouster of ex-CEO Renaud Laplanche, investors will be looking for further signs of progress in the company's third-quarter earnings report after after the close Tuesday.

The Analyst

KeyBanc Capital Markets' Josh Beck.

The Rating

Beck maintains a Sector Weight rating on LendingClub's stock with no assigned price target. (See Beck's track record here.) 

The Thesis

LendingClub should report improvements to its business in Tuesday's earnings report, including 7- to 12-percent quarter-over-quarter growth in loan origination, Beck said in a Monday note. Standard program origination in the third quarter is likely to fall in a range of $1.7 billion to $1.8 billion, with another $600 million for custom origination, for a total origination of $2.3-2.4 billion, Beck said. 

KeyBanc analysis found that retail funding — from self-managed individual investors — would likely come in at $250 million to $285 million in the third quarter, short of Beck's prior estimate of $325 million. Initial monthly data for the fourth quarter reveals a "slow start," with October average daily volume 5 percent lower than the third quarter average, Beck said. 

Price Action

Shares of Lendingclub are up 11 percent since the start of 2017, but down more than 75 percent lower from the company's 2014 IPO. 

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