The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how personal loan stocks fared in Q3, starting with LendingClub (NYSE:LC).
Personal loan providers offer unsecured credit for various consumer needs. The sector benefits from digital application processes, increasing consumer comfort with online financial services, and opportunities in underserved credit segments. Headwinds include credit risk management in unsecured lending, regulatory oversight of lending practices, and intense competition affecting margins from both traditional and fintech lenders.
The 9 personal loan stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 5.8%.
Thankfully, share prices of the companies have been resilient as they are up 5.9% on average since the latest earnings results.
LendingClub (NYSE:LC)
Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE:LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
LendingClub reported revenues of $266.2 million, up 31.9% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
Interestingly, the stock is up 16.3% since reporting and currently trades at $19.21.
Best Q3: Dave (NASDAQ:DAVE)
Named after the biblical David fighting financial Goliaths, Dave (NASDAQ:DAVE) is a digital financial services platform that helps Americans living paycheck to paycheck with cash advances, banking services, and tools to improve their financial health.
Dave reported revenues of $150.7 million, up 63% year on year, outperforming analysts’ expectations by 12.9%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
Dave achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 16.2% since reporting. It currently trades at $201.23.
Is now the time to buy Dave? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q3: Enova (NYSE:ENVA)
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE:ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Enova reported revenues of $802.7 million, up 16.3% year on year, in line with analysts’ expectations. Still, its results were good as it locked in a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Enova delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 19.2% since the results and currently trades at $135.89.
Read our full analysis of Enova’s results here.
FirstCash (NASDAQ:FCFS)
Offering a financial lifeline to the unbanked and credit-constrained since 1988, FirstCash (NASDAQ:FCFS) operates pawn stores across the U.S. and Latin America while also providing retail point-of-sale payment solutions for credit-constrained consumers.
FirstCash reported revenues of $935.6 million, up 11.7% year on year. This number surpassed analysts’ expectations by 9.3%. Overall, it was a stunning quarter as it also logged an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 7.5% since reporting and currently trades at $159.12.
Read our full, actionable report on FirstCash here, it’s free for active Edge members.
Affirm (NASDAQ:AFRM)
Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ:AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans.
Affirm reported revenues of $933.3 million, up 33.6% year on year. This print topped analysts’ expectations by 5.5%. It was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
The stock is up 3.5% since reporting and currently trades at $68.10.
Read our full, actionable report on Affirm here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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