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Here's Why LendingClub Stock Soared Today

By Joe Tenebruso – Oct 28, 2021 at 5:52PM

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Borrowers are flocking to the digital loan marketplace.

What happened

Shares of LendingClub (LC 2.51%) surged 33% higher on Thursday after the financial services company delivered strong third-quarter results. 

So what

LendingClub's revenue climbed 20% to $246.2 million, fueled by a 14% jump in loan originations, to $3.1 billion.

"Our success continues to be driven by our competitive advantages, including our growing base of 3.8 million members, our exceptional data science capabilities, and our proven marketplace model," CEO Scott Sanborn said in a press release.

Rolls of dollar bills are rising in a stair-step manner.

LendingClub's profits are soaring. Image source: Getty Images.

Notably, LendingClub's net interest income surged 42% sequentially to $65.3 million. The company has been building its loan portfolio following its acquisition of Radius Bancorp in February. 

All told, LendingClub's net income leaped 190% to $27.2 million, or $0.26 per share. That was more than double Wall Street's expectations for earnings per share of $0.12. 

Now what 

Analysts see more gains ahead for investors. For one, Wedbush analyst Henry Coffey boosted his price forecast for LendingClub's stock from $33.50 to $50. Coffey praised the online marketplace's booming loan origination volumes and improving profitability. 

LendingClub apparently agrees with Coffey's optimistic view. The company lifted its full-year guidance, which now includes:

  • Loan originations of $10.1 billion to $10.3 billion, up from a prior estimate of $9.8 billion to $10.2 billion 
  • Total revenue of $796 million to $806 million, up from $750 million to $780 million
  • Net income of $9 million to $14 million, up from a loss of $13 million to a loss of $3 million

"With our enhanced operating leverage, digital-first infrastructure, and the ongoing move of consumers toward online banking, there's no better time to grow a next-generation digital bank like LendingClub," Sanborn said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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