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Lending Club: It Doesn't Get Much Better Than This


The strong fundamental growth of Lending Club is severely undervalued in the stock price.

Recent struggles among competitors and regulatory huddles have unnecessarily hurt the stock price, driven by investor sentiment.

Additional misunderstanding about Lending Club’s business model and opportunities for profit growth have created a strong investment opportunity.

Lending Club (NYSE:LC), a peer-to-peer lending company headquartered in San Francisco, may have the best growth picture among financials moving into 2017. This is due to a recent decline in the stock price despite exemplary profit and EPS growth, and positive forward guidance. The recent decline, driven by investor sentiment in peer-to-peer lending, fundamentally misunderstands the business model and positive growth picture of Lending Club, focusing more on sentiment rather than fundamentals.

Lending Club is poised to release positive EPS numbers in Q1, with a consensus of $0.05 per share. This shift from negative to positive EPS in recent quarters is driven by continually growing profits and growth in loan originations. Compared to its peers, Lending Club also has stellar revenue growth (above 80% TTM) and an EBITDA margin near 70% (TTM). Operating income more than doubled from Q3 to Q4 last year, driven by revenues up by over 16% QoQ and reoccurring...