Lendingclub (HAPN) & Its Rivals Critical Review

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

Insider and Institutional Ownership

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

Profitability

This table compares Lendingclub and its peers’ 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	9.79%	-32.32%	2.43%

Valuation and Earnings

This table compares Lendingclub and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lendingclub	$998.85 million	$135.68 million	11.06
Lendingclub Competitors	$64.73 billion	$381.70 million	6.96

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

Analyst Ratings

This is a summary of recent recommendations for Lendingclub and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lendingclub	0	1	2	0	2.67
Lendingclub Competitors	899	3377	5271	269	2.50

Lendingclub currently has a consensus price target of $25.00, suggesting a potential upside of 36.17%. As a group, “Consumer Finance” companies have a potential upside of 10.96%. Given Lendingclub’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Lendingclub is more favorable than its peers.

Volatility & Risk

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

Summary

Lendingclub beats its peers 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.