Lending Club stock plunges to year low despite record origination and revenues

By Daniel Lanyon on Tuesday 14 November 2017

Alternative Lending

The marketplace lending platform’s recovery has taken a hit in recent days.

The marketplace lending platform’s recovery has taken a hit in recent days. 

Lending Club has downgraded its earnings guidance for the last three months of 2017 leading investors to jettison its stock.

This has prompted a new year low for its share price which is now only slightly higher than its all time-low following the exit of its founder and former CEO Renaud Laplanche back in May 2016.

Its share price is now down more than 36 per cent over the past year to $4.18, with strong selling evident since its third quarter results were announced last week.

Performance of Lending Club's Share Price over 1yr

Source: Google

Its Q3 numbers for 2017 showed improvements in investor and borrower demand for Lending Club’s platform as well as growth in revenue  – which is at it highest ever level - but crucially it missed expectations of $154m revenue for the quarter albeit by just $3.5m. Its guidance for Q4, however, was lowered to $158m-163m while analyst forecasts were previously significantly more.

Source: Lending Club

Scott Sanborn, CEO of Lending Club, said: "our ambitious goals in Q3 required strong execution to take full advantage of the seasonably favourable quarter, and we succeeded, capturing the increasing demand on both sides of our marketplace.”

“On the borrower side of the platform, demand continues to remain incredibly high. We processed a record number of applications, bringing the total borrowers served by Lending Club to over 2 million since launch and an improved efficiency from last quarter,” he added.

The news follows on from a strong second quarter that many bulls cheering on the recovery with loan originations in the second quarter at $2.15bn, up 10 per cent from both the first quarter of 2017 and compared to the same quarter last year.

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