Financial Analysis: Lendingclub (HAPN) and The Competition

Lendingclub (NASDAQ:HAPN) is one of 121 publicly-traded companies in the “Consumer Finance” industry, but how does it weigh in compared to its rivals? We will compare Lendingclub to similar businesses based on the strength of its valuation, profitability, institutional ownership, risk, earnings, analyst recommendations and dividends.

Profitability

This table compares Lendingclub and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lendingclub	18.67%	12.92%	1.66%
Lendingclub Competitors	9.87%	-32.24%	2.46%

Volatility and Risk

Lendingclub has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500. Comparatively, Lendingclub’s rivals have a beta of 1.24, suggesting that their average share price is 24% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lendingclub and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lendingclub	$998.85 million	$135.68 million	11.00
Lendingclub Competitors	$3.57 billion	$381.70 million	6.99

Lendingclub’s rivals have higher revenue and earnings than Lendingclub. Lendingclub is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

74.1% of Lendingclub shares are owned by institutional investors. Comparatively, 46.4% of shares of all “Consumer Finance” companies are owned by institutional investors. 3.3% of Lendingclub shares are owned by insiders. Comparatively, 21.8% of shares of all “Consumer Finance” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Lendingclub and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lendingclub	0	1	2	0	2.67
Lendingclub Competitors	897	3375	5269	269	2.50

Lendingclub presently has a consensus price target of $25.00, indicating a potential upside of 36.91%. As a group, “Consumer Finance” companies have a potential upside of 10.52%. Given Lendingclub’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Lendingclub is more favorable than its rivals.

Summary

Lendingclub beats its rivals on 8 of the 13 factors compared.

About Lendingclub

LendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.