Shares of the online personal lender and digital bank LendingClub (LC 14.61%) traded nearly 13% lower, as of 11:14 a.m. ET today. The company reported its fourth-quarter 2025 earnings after the market closed yesterday and held a conference call with Wall Street analysts.
No love after solid results
LendingClub reported diluted earnings per share (EPS) of $0.35 on total revenue of nearly $267 million, driven by approximately $2.6 billion in loan originations. All the numbers are significantly higher year over year, and EPS and revenue both beat consensus estimates.
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LendingClub also guided for $2.6 billion in originations and diluted EPS of $0.365 in the first quarter of 2026 at the midpoint of management's guidance. For the full year, management guided for $12.1 billion in loan originations and diluted EPS of $1.725, also at the midpoint of management's guidance. This represents 48% year-over-year growth in diluted EPS and 26% growth in originations.
Interestingly, guidance for both the current quarter and the full year of 2026 exceeded Wall Street consensus estimates. LendingClub is planning a significant accounting change this quarter, in which it will mark all of its loans as held-for-sale (HFS). Previously, the company accounted for a portion of the loans as held-for-investment (HFI).
NYSE: LC
Key Data Points
Loans accounted for by HFS are marked to fair value each quarter, while HFI loans are provisioned for potential future loan losses upfront, which can result in a seemingly more punitive charge. I'm guessing investors thought the accounting change might lead to an even better forward guidance than what management provided.
Trading at an attractive multiple
It will likely take time for the market to digest LendingClub's new accounting change, but the stock now trades at about 10 times forward earnings, despite strong growth. I think this is an attractive entry point.
