Wrapping up Q2 earnings, we look at the numbers and key takeaways for the personal loan stocks, including Enova (NYSE: ENVA) and its peers.
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 1.5% below.
Luckily, personal loan stocks have performed well with share prices up 13.2% on average since the latest earnings results.
Enova (NYSE: ENVA)
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE: ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Enova reported revenues of $764 million, up 21.6% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA and EPS estimates.
"We are pleased to report another quarter of strong performance," said David Fisher, Enova's CEO.
Enova delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 14.2% since reporting and currently trades at $127.70.
Read why we think that Enova is one of the best personal loan stocks, our full report is free.
Best Q2: 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 EBITDA estimates.
The market seems happy with the results as the stock is up 35% since reporting. It currently trades at $17.74.
Is now the time to buy LendingClub? Access our full analysis of the earnings results here, it’s free.
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%. It was a satisfactory quarter as it also posted EPS in line with analysts’ estimates.
Interestingly, the stock is up 35.5% since the results and currently trades at $16.26.
Read our full analysis of Nubank’s results here.
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 topped analysts’ expectations by 4.7%. Overall, it was a stunning quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 12.6% since reporting and currently trades at $90.
Read our full, actionable report on Affirm here, it’s free.
Sezzle (NASDAQ: SEZL)
Founded in 2016 as an alternative to traditional credit cards for younger shoppers, Sezzle (NASDAQ: SEZL) provides a payment platform that allows consumers to split purchases into four interest-free installments over six weeks at participating retailers.
Sezzle reported revenues of $98.7 million, up 76.4% year on year. This number surpassed analysts’ expectations by 4%. It was an exceptional quarter as it also produced a beat of analysts’ EPS estimates.
Sezzle achieved the fastest revenue growth among its peers. The stock is down 34.4% since reporting and currently trades at $91.56.
Read our full, actionable report on Sezzle here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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