LendingClub Corp (NYSE:LC) is the worlds leading online market place connecting investors and borrowers. The entity is transforming the financial system to make investing more rewarding and credit more affordable. It operates at a lower cost than conventional bank lending programs and forwards the savings on to investors in the form of robust returns, and to borrowers by means of lower interest rates.
Lending club matches borrowers in need for personal loans ranging from as low as $1,000. Additionally, the business has started to cater to small business loans and going forward, it wants to provide finances for mortgages and car loans.
Business Finance News believes that ever since the debut of Lending Club, online lending has expanded at an substantial rate. The analysts are mainly bullish on the stock, as the corporation is well-positioned to take benefit of future opportunities. Out of a total of 19 analysts polled by Bloomberg, nine rated Lending Club stock as a Buy, eight recommend a Hold, while only two suggest a Sell. The 12-month consensus target price stands at $19.28, representing a return potential of about 51% over its last quoted price.
On a separate note, after the announcement of Lending Clubs financial and operating results for the third-quarter of fiscal year 2015 (3QFY15), Pacific Crest analysts Josh Beck has reiterated an Overweight rating, along with the price objective of $23.
In the earnings report, Lending club posted earnings per share (EPS) of $0.04, topping the analysts expectations of $0.02. Moreover, revenue came in at $116.28 million, surpassing the consensus estimate of $108 million.
Lending Club made a blockbusting entry on the New York Stock Exchange (NYSE) with its Initial Public Offering (IPO) of 66.7 million shares at a price of $15. The company stock surged more than 56% in its first day of trading. However, the stock has lost approximately 50% of its value year-to-date (YTD), over fears of overvaluation and competition, whereas, Samp;P 500 Index has increased more than 2% over the same period.
During the last 12 months, the companys enterprise value stood at $8,322.7, Net Debt of 3,516.4 million, and change in investing activities of $(2252.5). One can conclude from these figures that the stocks intrinsic value comes in at $6.78. This means that the stock trading in the market is currently over valued at its Fridays closing price of $12.72.
Moreover, Relative Strength Index (RSI), which stands at 35.67, denotes that the stock is trading close to the over-sold region. A rank greater than 70 is considered to indicate over-bought, whereas, below 30 symbolizes over-sold.
According to Reuters, US retail sales were below economists expectations in October. Economists on the Street forecasted sales to surge 0.3%, however, it increased by only 0.1% last month after remaining same in both August and September.
On November 6, the Bureau of Labor Statistics broadcasted employment figures. The data recommended that an excess of 271,000 jobs were added in the national market, demonstrating a drop in unemployment. It is expected that the Federal Reserve will be increasing interest rates in December.
Business Finance News believes that even if the rates go up, it is likely to be a small increment and will gradually increase. The increasing of the rates represent a growing economy. Moreover, as the retail data will move in an upward trajectory, Lending Club will be able to post outstanding results as it is well-positioned to take advantage of forthcoming opportunities.