LC First Quarter 2018 Earnings Release and Conference Call Tuesday 5/08/2018

[Rob L]

Something to mark on your calendar. Less than two weeks away.
LC First Quarter 2018 Earnings Release and Conference Call Expected Tuesday 5/08/2018 at 5 pm EDT after the market closes.

http://ir.lendingclub.com/calendar.aspx?iid=4213397" class="bbc_link" target="_blank">http://ir.lendingclub.com/calendar.aspx?iid=4213397

[MoMoney]

My guess is that they are gonna report results within their guidance but probably at the lower end as cost of borrowing for investors has gone up and bank participation was already sharply lower last quarter partly because of that, and they hinted this could worsen as interest rates hike.
Additionally, according to PeerIQ marketplace securitization was 50% lower in q1 vs q4.
It also looks as if they are having competitive issues on the borrowing side as they have left the interest rates for borrowers unchanged for the most part.
Their CLUB certificates could potentially surprise us tho but the volume was so low in q4 that I don't expect a big origination bump there.
Their interest revenue is probably going to help push the revenue higher although with interest rates having risen so much since last quarter, there could be considerable markdowns (accounting rules).
Having said all of that, the stock is trading at a very attractive valuation right now when you look at their EBIDTA, revenue, and cash on hand so I'm heavily invested in them. I really hope they initiate a stock buyback but that could be unlikely as they are more and more tapping into their balance sheet to originate loans.
The FTC thing is nonsense and political and they will easily clear that but it's unfortunate that their brand is getting a hit from it, and there will be additional legal costs.
Their other legal issues related to the ouster of the CEO are behind them for the most parts.
I think there is a big possibility that they will sell themselves to a bank this year. They have a very strong and well connected board. It's unfortunate that their CEO lacks vision. They could have so much potential as a market leader but the best path forward might be to sell themselves at a good premium. I also hope they won't be subjected to a takeover as that could sharply reduce the premium.

[TravelingPennies]

Did anyone else's audio of the conference call drop out after the first 5 minutes??
I wanted to hear the Q&A, but no luck!!

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4861.msg43415#msg88888888Quote"> from: Rob L on May 08, 2018, 05:49:17 PM

[TravelingPennies]

Lending club reported their earnings above their midpoint guidance and beating the expectations with a respectable revenue increase of 22% YoY and strong Adjusted EBIDTA of $15.3 million up from $0.2 million last year. Notable things from the conference call:
* The CLUB Certificates were the highlight of the earnings. They attracted over $160 million in new funding from several of the top names in asset management. They are planing on expanding the rollout.
* Lending club maintains that FTC claims are factually unwarranted and don't see any problems with their practices and expect to resolve the FTC issue.
* FTC complaint has not affected either investor side or borrower side. Scott pretty much said that investors are on the same page with lending club on the FTC issue, and see no problem going forward.
* They have expanded margins and also were able to lower marketing expenses partly because of their scale.
* Bank participation has gone up again following a decrease last quarter.

I think this was a great earnings report for lending club. I think this is a very attractive price point for the stock. It looks like the stock has barely budged after hours. I'm disappointed that there was no news of share repurchase given the depressed stock price.

Things I wish they had talked about:
* Product roadmap and why they are so slow in launching new products when they said they have new products in pipeline a while ago. I would expect a credit monitoring service by now. Upgrade got this done in a few months. I hope the new CTO is more competent.
* More information on Cross selling products in the pipeline if there is any
* More information on how the car loan refinance and business loans are doing
* What percentage of users are repeating users vs new users. They had promised to touch on this in the last earnings call.
* Why did they need to tap to their credit facility to finance loans when they have so much cash on hand which is also increasing with positive EBIDTA.
* Why no share repurchase plan when they believe "FTC claims are factually unwarranted" and share prices are at such a depressed level, and when they had previously launched one at much higher prices.

[TravelingPennies]

The market seems to have liked the report (or maybe Mr. Chen is buying again).
Stock spiked to $3.34 (about +18%) in first 15 minutes of trading.
That's about where it was pre-FTC announcement.