LendingClub Corporation (LC): Looking For The Next Breakout?

Analysts at Morgan Stanley cut their rating on shares of LendingClub Corporation (NYSE:LC) from Overweight to Equal-Weight in their opinion released on July 19. Guggenheim analysts have downgraded their rating of LC stock from Buy to Neutral in a separate flash note to investors on February 23. Analysts at Maxim Group are sticking to their Buy recommendation. However, on December 11, they lifted target price for these shares to $6 from $8. Analysts at Maxim Group, made their first call for the stock with a Buy rating, according to a research note that dated back to December 11.

By watching the trading activity of corporate insiders, it will become easier to get a sense of LendingClub Corporation (NYSE:LC)’s prospects. The earliest insider trade took place on 07/20/2018. Williams Simon parted with a total of 50 thousand shares of company at average share price of $4.33. The total for the sales was set at $216.5 thousand. After this transaction, the Director account balance stood at 60.79 thousand shares. The stock lost -20.79 percent since that insider sale. On 07/16/2018, Bogan Timothy, Chief Risk Officer, sold 25 thousand shares at a price per share of $4.5. This removed 112.5 thousand shares from the insider’s fortune and the stock saw a -23.78 percent retreat in value since the news became public. This transaction left 149.05 thousand shares in the Chief Risk Officer account. On 06/22/2018, Director Williams Simon performed a sale transaction worth $198 thousand. This sale at $3.96 each has eliminated 50 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -13.38 percent decrease since the transaction was reported. The insider now is left with 8 thousand shares remaining in the account. Williams Simon, who performs the Director job, sold 50 thousand shares for $170 thousand. The disposal occurred on 05/18/2018 was priced at $3.4 per share. The share price soared 0.88 percent since the reporting date. Williams Simon now left with a stake of 63.34 thousand LC stock worth $217.24 thousand after the insider selling.

LendingClub Corporation (LC) is expected to jump by 22.74 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $7 price as 12-month high target. This represents a whopping 104.08 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $4, which represents a return potential of 16.62 percent when compared to the closing price of the stock of $3.43 on Monday, February 11. The lowest price target for the stock is $3 — slightly more than -12.54 percent from LC’s current share price.

The shares are currently floating around the first support level of $3.39. Below this, the next support is placed in the zone of $3.35. Till the time, the LC stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 65.57 on daily chart, which may remain a cause for concern. If the price breaks below $3.35 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $3.48 mark may result into a pull-back move towards $3.53 level.

LC shares accumulated 0.05 points or 1.48 percent on Monday to $3.43 with a heavy trade volume of 2.761 million shares. After opening the session at $3.4, the shares went as high as $3.49 and as low as $3.4, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $1.42 billion and now has 414.85 million shares outstanding. LendingClub Corporation (LC) stock has gained 15.49 percent of market value in 21 trading days.

LC stock has a trailing 3-year beta of 1.68, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.62 a share in the trailing twelve months. The stock’s value has surged 30.42 percent year to date (YTD) against a decline of -7.3 percent in 12 month’s time. The company’s shares still trade -24.62 percent away from its 1-year high of $4.55 and 39.43 percent up from 52-week low of $2.46. The average consensus rating on the company is 2.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of LendingClub Corporation (LC) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry LC operates in has an average P/E of 26.92. Its P/E ratio went as low as 0X and as high as 0 over the 5-year span. Further, it is sporting a 1.3 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.74. 61.2 percent is the gross profit margin for LendingClub Corporation and operating margin sits at -18.8 percent. Along with this, the net profit margin is -18.9 percent.

LC will be showing off its Q4 earnings on February 19. Analysts are forecasting revenue to climb 16.2 percent to $182M in the next fiscal quarter, while earnings are seen soaring by nearly 100 percent to $0.02 per share. History has shown that shares in LendingClub Corporation have gone up on 9 different earnings reaction days and are predicted to add 0.1 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.03 per share, better than the $0.02, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $185M, better than the $182M analysts expected. Earnings are estimated to increase by -34.4 percent this year, 88.89 percent next year and continue to increase by -8.6 percent annually for the next 5 years.