Yahoo Finance LendingClub Corporation’s (NYSE:LC) Profit Outlook
LendingClub Corporation’s (NYSE:LC): LendingClub Corporation operates an online marketplace platform that connects borrowers and investors in the United States. The company’s loss has recently broadened since it announced a -US$153.83m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$155.17m, moving it further away from breakeven. Many investors are wondering the rate at which LC will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for LC.
View out our latest analysis for LendingClub
According to the industry analysts covering LC, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$15.37m in 2020. So, LC is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which LC must grow year-on-year. It turns out an average annual growth rate of 63.19% is expected, which is rather optimistic! If this rate turns out to be too aggressive, LC may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of LC’s upcoming projects, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that LC has managed its capital judiciously, with debt making up 38.78% of equity. This means that LC has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on LC, so if you are interested in understanding the company at a deeper level, take a look at LC’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:
Historical Track Record: What has LC’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on LendingClub’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
