The landscape has been quite challenging for financial companies over the past 18 months, as the Federal Reserve raised interest rates at a rapid pace, consumers were challenged by inflation, and the possibility of recession caused banks to increase their loan loss reserves, compressing net income. First, fintech companies are generally one- or two-product companies, as they are much earlier in their lifecycles than diversified big banks are. Second, there's a perception that fintechs may target a less creditworthy consumer, given that most fintechs tout new ways of underwriting clients overlooked or overcharged by traditional banks.
LendingClub (LC) delivered earnings and revenue surprises of -5% and 2.72%, respectively, for the quarter ended December 2022. Do the numbers hold clues to what lies ahead for the stock?
LendingClub (LC) made it through our 'Fast-Paced Momentum at a Bargain' screen and could be a great choice for investors looking for stocks that have gained strong momentum recently but are still trading at reasonable prices.