Key Points
The digital consumer bank generated earnings more than double the level of consensus estimates.
Management also raised guidance.
The quarter could mark an inflection point for the company.
10 stocks we like better than LendingClub ›
Shares of digital consumer bank LendingClub (NYSE: LC) blasted up roughly 21%, as of 10:49 a.m. ET today. The company reported blowout second-quarter earnings and raised guidance.
An inflection point
After somewhat disappointing first-quarter results, largely due to higher marketing spend and the chaos around tariffs, LendingClub, which is largely in the business of refinancing credit card debt, delivered big in the second-quarter, generating earnings per share of $0.33 on total revenue of roughly $248.5 million. The fintech company easily beat Wall Street consensus estimates of $0.15 EPS and about $227.5 million of revenue.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Image source: Getty Images.
EPS also increased 154% year over year, while revenue rose 33%. A big reason for the beat can be attributed to strong credit performance, with expected loan losses and the provision for loan losses coming in much lower than expected.
However, LendingClub also generated stronger origination volume than expected, with quarterly originations of nearly $2.4 billion. Management also raised its guidance for the third quarter, saying it expects to generate $2.55 billion of quarterly originations at the midpoint of guidance, $95 million of pre-provision net revenue, and a return on tangible common equity (ROTCE) in the range of 10% to 11.5%.
“This quarter marks an inflection point in both our strategic and financial trajectory,” LendingClub’s CEO Scott Sanborn said on the second-quarter earnings call.
The stock can keep moving higher
Even after the big move, LendingClub still only trades at about 138% of its tangible book value. That’s not the same bargain it once was, but also not expensive, considering management is now projecting as high as an 11.5% ROTCE on an inflated capital base. If the company’s capital levels were lower and closer to peers, ROTCE would likely be much higher.
Given the momentum of the business, strong credit quality, and the inflection point for earnings, I continue to believe the stock is a buy.
Should you invest $1,000 in LendingClub right now?
Before you buy stock in LendingClub, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LendingClub wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $630,291!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,075,791!*
Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 29, 2025
Bram Berkowitz has positions in LendingClub. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
