Let’s dig into the relative performance of OneMain (NYSE: OMF) and its peers as we unravel the now-completed Q2 personal loan earnings season.
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 1.4% below.
In light of this news, share prices of the companies have held steady as they are up 1.3% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ yield and EPS estimates.
The stock is down 4.4% since reporting and currently trades at $56.05.
Is now the time to buy OneMain? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: 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, outperforming analysts’ expectations by 16%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
Dave scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 14.9% since reporting. It currently trades at $203.40.
Is now the time to buy Dave? Access our full analysis of the earnings results here, it’s free for active Edge members.
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%. It was a satisfactory quarter as it also posted EPS in line with analysts’ estimates.
Interestingly, the stock is up 27.4% since the results and currently trades at $15.29.
Read our full analysis of Nubank’s results here.
SoFi (NASDAQ: SOFI)
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
SoFi reported revenues of $854.9 million, up 42.8% year on year. This result surpassed analysts’ expectations by 5.7%. It was a stunning quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ transaction volumes estimates.
The company reported 11.75 million active customers, up 33.9% year on year. The stock is up 20.2% since reporting and currently trades at $25.30.
Read our full, actionable report on SoFi 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. This number beat analysts’ expectations by 9.2%. Overall, it was an incredible quarter as it also put up a beat of analysts’ EPS and EBITDA estimates.
The stock is up 12.3% since reporting and currently trades at $14.75.
Read our full, actionable report on LendingClub here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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