The Consensus EPS Estimates For LendingClub Corporation (NYSE:LC) Just Fell Dramatically

The latest analyst coverage could presage a bad day for LendingClub Corporation (NYSE:LC), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from nine analysts covering LendingClub is for revenues of US$792m in 2024, implying a painful 33% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to dive 34% to US$0.32 in the same period. Prior to this update, the analysts had been forecasting revenues of US$906m and earnings per share (EPS) of US$0.42 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for LendingClub

It'll come as no surprise then, to learn that the analysts have cut their price target 18% to US$8.97.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 27% by the end of 2024. This indicates a significant reduction from annual growth of 4.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It's pretty clear that LendingClub's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for LendingClub. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of LendingClub.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple LendingClub analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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