Lending Club Stock Goes Up as interest in P2P Lending Increases

lending club stock valueFrom www.inc.com -

Everyone wants in the Club. Shares of Lending Club stock advanced 4 percent Wednesday after the company reported better-than-expected results and raised its full-year outlook as more people discover peer-to-peer lending as a cheaper alternative to a traditional bank.

It's a positive bit of good news for a company whose the stock is down nearly 30 percent year to date as investors wait to see if Lending Club, and its competition, become as big as some investors believe it will be.

Lending Club is the largest company in the peer-to-peer lending industry, which has become one of the hottest topics among investors in the past year. Lending Club is not a bank nor does it lend money itself. Like other peer-to-peer lending companies, Lending Club operates a website that puts potential borrowers and investors together. Lending Club earns revenue by charging a servicing fee on all loans it helps create.

The San Francisco-based company said it earned an adjusted profit of 2 cents per share on revenue of $81.2 million. Analysts surveyed by Zacks Investment Research anticipated a profit of


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Editor’s Notes about Lending Club stock:

♦ Peer-to-peer lending has long been seen as a likely borrowing option of tech-savvy Millennials and young people who embrace fintech, but interestingly enough, now that p2p lending is gaining more and more mainstream attention, Lending Club reports that almost half of their loans are going to people between the ages 36-50. This is a sure sign that p2p lending is becoming less niche and more widely accepted as a practical borrowing option for consumers and small businesses.

♦ Stock investors are still a bit wary to go all in though. Even though the p2p lending sector has shown great growth and potential for even more growth, some are holding off on Lending Club stock because of the perceived high price. Even though the stock price is 30% lower this year, it still costs a whopping $348 for each dollar of company earnings. Even though higher earnings multiples are normal (even expected) for businesses with major upside and high growth potential some are choosing to wait things out and see what happens. Whether that's a wise investment choice or not remains to be seen. Lending Club's stock price went up by 4%, or 73 cents, to $18.31.

♦ The interest rates for borrowers with good to great credit are much lower with peer-to-peer lenders like Prosper and Lending Club. Because of this, many predict that the small market share that they have in the lending sector will continue to grow as more borrowers begin to understand how to get a peer-to-peer loans. The lending model is definitely shaking up the banking industry, some banks are aligning themselves with the p2p online lenders and some, like Goldman Sachs, are adopting the online loan model in order to give loans to small businesses and consumers.

Lending Club stock related article: Man gets rich from investing in penny stock.

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