This Fintech Stock Just Smashed Its First Quarter Forecast
A various factors helped loan club (NYSE:LC) have a very successful first trimester. In this video clip from the “Future of Fintech” on Motley Fool Live, recorded on May 19Fool.com contributor Bram Berkowitz briefly explains why he’s excited about the loan company.
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Bram Berkowitz: This is one of my most important positions for fintech. I’m still very optimistic about it. I think they had a good first quarter. They’ve raised their forecast, they’ve significantly exceeded forecast, they’re increasing the credit quality of the loans they’re making, and they’re also in the business of personal loans like Reached (NASDAQ: UPST)but completely different models.
Upstart just got hammered for holding loans because their model is a marketplace, LendingClub is a digital marketplace bank, they got the banking charter and they actually want to hold loans. They’re actually increasing the amount of loans they’re going to hold, they’re doing about a quarter of that. But it just goes to show that even though they are in the same space, they have different patterns and they can both be successful.
But if LendingClub was like, hey, we’re gonna stop holding all of our loans, they’ll probably be hammered, and if Upstart was like, we’re gonna start holding more, like we’ve seen, they’ve been hammered. It’s good to just compare and contrast, and look at the different models, but both work in the personal loan business. But sorry to ramble, but yeah, I’m always an optimist and if you have any other questions, don’t hesitate.
Bram Berkowitz has positions in LendingClub and has the following options: January 2023 long calls of $45 on LendingClub and January 2023 long calls of $48.42 on LendingClub. The Motley Fool holds positions and recommends Upstart Holdings, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.