What happened
Shares of the digital lender OppFi (OPFI -8.01%) jumped nearly 13% Friday morning following the release of its third-quarter earnings report Thursday night. However, the stock had given away most of those gains by the afternoon, with shares trading roughly 1% higher as of 1:25 p.m. EST.
So what
OppFi reported earnings per share (EPS) of $1.06 on total revenue of $92 million. Adjusted EPS was $0.21. The results beat analyst estimates.
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The company, which is seeking to disrupt the subprime lending space, originated $164.5 million in loan volume in Q3, while increasing automated loan approvals from 51% in Q2 to 58% in Q3.Net charge-offs, which is debt unlikely to be collected and a good indicator of losses, jumped from 28% in Q2 to 36% in Q3.
OppFi also maintained its full-year guidance of adjusted net income of $62 million to $66 million on total revenue of $350 million to $360 million.
Now what
It was a solid quarter for OppFi, which to me continues to look like a profitable and undervalued fintech company. The company is not getting the credit I think it deserves, likely because it operates in the subprime lending space.
But I like management's vision and the innovative financial products they are rolling out. Ultimately, I see this as a stock that can go much higher in the long term.
