LendingClub (LC) Q4 Earnings: What's In Store For The Stock?

LendingClub Corporation LC is slated to announce fourth-quarter and 2017 results on Feb 20, after the market closes. Its quarterly earnings and revenues are projected to grow year over year.

Last quarter, the company reported adjusted earnings per share of 3 cents, which met the Zacks Consensus Estimate. While the quarter witnessed higher revenues, an increase in expenses and fall in loan balance were the undermining factors.

LendingClub beat estimates in two of the trailing four quarters, the average beat being 20.8%.

LendingClub Corporation Price and EPS Surprise


LendingClub Corporation Price and EPS Surprise | LendingClub Corporation Quote

However, activities of the company in the fourth quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 2 cents remained unchanged over the last 30 days. Nevertheless, the figure reflects 200% year-over-year improvement.

Factors to Impact Q4 Results

LendingClub’s primary source of revenues is transaction fees on loans, which it helps to issue and subsequently lists online for investors to fund. Since loan originations in the quarter were decent, we expect transaction fees to rise marginally. Also, the company’s investments in channel diversification and ability to offer affordable credit to a wide spectrum of borrowers are likely to continue supporting overall revenue growth.

Management projects total net revenues in the fourth quarter to be in the range of $155-$160 million, driven by multiple borrower initiatives and continued strong demand from both borrowers and investors. The figure reflects year-over-year growth of around 21%.

Notably, the Zacks Consensus Estimate for sales for the quarter is $157.2 million, which reflects growth of 21.7% on a year-over-year basis.

The company incurs significant expenses for selling and marketing its products. For the to-be-reported quarter, LendingClub projects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to be nearly $16-$20 million.

Management expects net loss in the range of $10-$6 million compared with the year-ago loss of $32.3 million.

Earnings Whispers

Let’s see what our quantitative model predicts.

According to our quantitative model, chances of LendingClub beating the Zacks Consensus Estimate in the fourth quarter are quite low. This is because the stock doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which is required to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for LendingClub is 0.00%.

Zacks Rank: LendingClub has a Zacks Rank #4 (Sell), which lowers the predictive power of ESP.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Schedule of Other Stocks

Both Financial Engines, Inc. FNGN and Hercules Capital, Inc. HTGC are scheduled to announce results on Feb 22, while Corporate Capital Trust, Inc. CCT is slated to report on Mar 6.

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LendingClub Corporation (LC): Free Stock Analysis Report
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