Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Dave (NASDAQ: DAVE) and the best and worst performers in the personal loan industry.
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 an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was 1.7% below.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.
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 $131.8 million, up 64.5% year on year. This print exceeded analysts’ expectations by 16%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS and revenue estimates.
“It was another standout quarter for Dave as we delivered record-setting performance across key metrics,” said Jason Wilk, Founder and CEO of Dave.
Dave scored the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.4% since reporting and currently trades at $207.
Is now the time to buy Dave? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $248.4 million, up 32.7% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 21.4% since reporting. It currently trades at $15.95.
Is now the time to buy LendingClub? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q2: Nubank (NYSE: NU)
With nearly 94 million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Nubank reported revenues of $2.64 billion, up 20.8% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a mixed quarter because it struggled in other parts of the business.
Interestingly, the stock is up 28.3% since the results and currently trades at $15.40.
Read our full analysis of Nubank’s results here.
OneMain (NYSE: OMF)
Dating back to 1912 and formerly known as Springleaf, OneMain Holdings (NYSE: OMF) provides personal loans, auto financing, and credit cards to nonprime consumers who have limited access to traditional banking services.
OneMain reported revenues of $1.21 billion, up 10.2% year on year. This result beat analysts’ expectations by 1.7%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ yield estimates and a beat of analysts’ EPS estimates.
The stock is down 5.4% since reporting and currently trades at $55.46.
Read our full, actionable report on OneMain 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 $876.4 million, up 33% year on year. This print surpassed analysts’ expectations by 4.7%. It was a stunning quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 3.1% since reporting and currently trades at $77.48.
Read our full, actionable report on Affirm here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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