Don’t Count Out LendingClub Corp (LC) Shares Just Yet


LendingClub Corp (NYSE:LC) shares took a dive in after-hours trading Tuesday, after the peer-to-peer lending platform swung to a fourth-quarter loss and operating revenue declined in the quarter. LendingClub posted a net loss of $32.3 million, compared with net income of $4.6 million a year ago, as loan originations tumbled 23% to $1.99 billion.

However, BTIG analyst Mark Palmer believes the stock was sold off primarily due to a “sell on news” reaction, where investors sell a stock as the primary catalyst for the stock has now come and gone.

Palmer wrote, “Insofar as shares of LendingClub drifted lower in extended trading today after the company reported its 4Q16 results following the market close, we believe that was something of a “sell the news” reaction to a better-than-expected adjusted EBITDA print following appreciation in the stock of almost 26% YTD, combined with 1Q17 guidance that was somewhat lower than expected.”

“With that said, there was much to like in LC’s 4Q16 report beyond the ($2.2mm) in adjusted EBITDA the company reported which exceeded the consensus estimate of ($6.2mm) and our estimate of ($4.9mm), in our view,” the analyst added.

As such, Palmer reiterated a Buy rating on LendingClub shares, with a price target of $9.00, which implies an upside of 36% from today’s closing price.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Palmer has a yearly average return of 5.9% and a 56% success rate. Palmer has a -15.2% average return when recommending LC, and is ranked #454 out of 4430 analysts.

Out of the 4 analysts polled in the past 3 months, one rates LendingClub stock a Buy, while four rate the stock a Hold. With an upside potential of 11%, the stock’s consensus target price stands at $7.33.