Does LendingClub (LC) Shifting More Loans Held‑for‑Sale Quietly Redefine Its Core Earnings Model?

• LendingClub recently highlighted its growing foothold among the “motivated middle” of consumers and its shift from holding loans for investment to classifying more loans as held-for-sale, aiming to reshape how it generates revenue.
• This pivot toward a more sale-oriented loan book, combined with a strong repeat-borrower base in today’s credit conditions, could alter how LendingClub balances growth, risk, and earnings mix over time.
• We’ll now examine how LendingClub’s move toward held-for-sale loans may influence its existing investment narrative and future risk-reward profile.

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LendingClub Investment Narrative Recap

To own LendingClub, you need to believe it can keep turning its personal loan franchise and “motivated middle” niche into durable earnings while managing credit and funding risks. The shift toward held-for-sale loans does not change the core near term catalyst, which remains the company’s ability to sustain profitable growth in personal loans amid competition and evolving credit conditions, nor does it remove the key risk of exposure to consumer credit cycles.

The recent authorization of a US$100,000,000 share repurchase program, running through the end of 2026, sits alongside this balance sheet pivot and frames how management is thinking about capital allocation as earnings have increased in recent quarters. For investors, the combination of buybacks, higher recent profitability and a move to a more sale oriented loan book puts extra focus on how stable LendingClub’s margins and credit costs prove to be through different parts of the credit cycle.

Yet even with these positives, investors should still watch how dependent results remain on unsecured personal loans and what happens if credit conditions turn...

Read the full narrative on LendingClub (it's free!)

LendingClub's narrative projects $1.3 billion revenue and $269.5 million earnings by 2028. This assumes revenue will decrease by 0.5% per year and requires about a $195.5 million earnings increase from $74.0 million today.

Uncover how LendingClub's forecasts yield a $21.91 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Two members of the Simply Wall St Community currently see fair value for LendingClub between US$21.91 and US$27.44, highlighting how far opinions can stretch. Against that range, the big open question is how its reliance on personal loans in changing credit conditions could influence future performance, so it is worth weighing several viewpoints before making up your mind.

Explore 2 other fair value estimates on LendingClub - why the stock might be worth just $21.91!

Build Your Own LendingClub Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your LendingClub research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free LendingClub research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate LendingClub's overall financial health at a glance.

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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.

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