More than the
Rating Remains At Hold, However
However, Canaccord Genuity’s Michael Graham prefers to remain on the sidelines, as banks are still only 15 percent of origination volume, below the targeted 25 percent. In addition, though transaction yields rose, higher operating costs weighed on margins.
“Volume from banks is likely to take a while to ramp back to normal levels, but the company maintains that early signs are positive,” Graham wrote in a note.
Good News Abounds
The analyst noted that the outlook for more normal growth and margins in 2017 is “firming,” despite expectations of costs to stay at a “temporarily high level” in the fourth quarter.
That said, the company’s limited commentary on the 2017 outlook has made the analyst cautious.
“However, management is providing very little regarding views on structural growth and we think that the set of possibly 2017 outcomes is sufficiently diverse to warrant a continued HOLD rating,” Graham continued.
As such, Graham cut his 2016/2017 EPS estimates to ($0.12)/$0.07 from ($0.09)/$0.22 to account for a slower ramp up of originations and greater opex. But, he raised his price target by $1 to $7.
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|Nov 2016||Morgan Stanley||Upgrades||Equal-Weight||Overweight|
|Oct 2016||Wedbush||Initiates Coverage On||Underperform|
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