Despite lower earnings than a year ago, LendingClub (NYSE:LC) investors are up 80% since then

It's been a soft week for LendingClub Corporation (NYSE:LC) shares, which are down 13%. But that doesn't change the reality that over twelve months the stock has done really well. To wit, it had solidly beat the market, up 80%.

Since the long term performance has been good but there's been a recent pullback of 13%, let's check if the fundamentals match the share price.

See our latest analysis for LendingClub

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over the last twelve months, LendingClub actually shrank its EPS by 4.4%.

We don't think that the decline in earnings per share is a good measure of the business over the last twelve months. It makes sense to check some of the other fundamental data for an explanation of the share price rise.

Unfortunately LendingClub's fell 5.7% over twelve months. So the fundamental metrics don't provide an obvious explanation for the share price gain.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

LendingClub is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

We're pleased to report that LendingClub shareholders have received a total shareholder return of 80% over one year. That gain is better than the annual TSR over five years, which is 3%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand LendingClub better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for LendingClub you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.