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Why Shares of LendingClub Corporation Jumped Today

By Jordan Wathen - Feb 16, 2016 at 3:53PM

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Call it the perfect trifecta as LendingClub reports better-than-expected earnings, raises guidance, and announces a $150 million repurchase program.

What: Shares of LendingClub Corporation (LC -1.45%) are getting a lift as the company rides the tailwinds of a better-than-expected earnings report on Friday, rising nearly 14% as of 3:00 p.m. ET.

Shares of its business-to-business rival, On Deck Capital (ONDK), also appear to be joining in the fun, jumping about 10% today. 

So what: LendingClub reported record originations, operating revenue, adjusted EBITDA, and even net income on a GAAP basis for the fourth quarter. The online lender originated $2.58 billion of loans during the period, an increase of 82% over a year ago.

Operating revenue rose by 93% to $134.5 million, and adjusted EBITDA surged 210% to $24.6 million for the fourth quarter. On a GAAP basis, the company earned $0.01 per diluted share for the fourth quarter vs. -$0.07 per share during the same quarter last year.

In the earnings release, LendingClub reported that its board of directors authorized up to $150 million of share repurchases in the next year. At the current price of about $8.00 per share, it could buy back about 4.6% of diluted shares outstanding as of Dec. 31, 2015.

Now what: Looking ahead, LendingClub believes that it can reach lofty growth targets, helped by reinvestment from its members who use the site to invest in loans online. 

The company noted that, based on current forecasts, it expects that its $9 billion servicing portfolio will return $7 billion in principal and interest to investors in 2016. If that capital is reinvested by its members, it would fund more than half its targeted originations in the next year.

LendingClub guided for full-year operating revenue of $730 to $740 million, a 72% improvement over 2015. In addition, it expects adjusted EBITDA in the range of $130 to $145 million, a 97% improvement over 2015. Guidance for full-year 2016 was modestly higher than the guidance it delivered to investors in Nov. 2015. 

Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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LendingClub Corporation Stock Quote
LendingClub Corporation
$15.01 (-1.45%) $0.22
On Deck Capital, Inc. Stock Quote
On Deck Capital, Inc.

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