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LendingClub Slides On Mixed Earnings, While Brinker Sizzles Up 15%

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    Perpetual Alpha
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Summary

  • After missing EPS estimates by only a penny and beating revenue expectations by $10.73M, LendingClub shares dropped 18% today following its mixed earnings result.
  • Despite the current setback, LC projects strong growth, with loan originations expected to reach $2.3B by Q4 2025.
  • Shares of Brinker International reached a record high following a tremendous earnings beat, with revenue climbing 26% and profitability nearly tripling Y/Y.
  • Brinker substantially raised its FY2025 guidance, projecting sales of $5.15B–$5.25B (up from $4.70B–$4.75B) and EPS of $7.50–$8.00 (increased from $5.20–$5.50).
  • Since inception, the Alpha Picks Portfolio Total Return has delivered an impressive +167% versus the S&P 500’s +60%.

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LendingClub Sinks on Earnings Miss

Fellow Alphas,

LendingClub Corporation (LC) experienced a significant decline Wednesday morning following its post-market earnings release on Tuesday, January 28th. Despite missing consensus EPS estimates by only a penny, the stock had fallen 22% by market open before regaining some ground by mid-day trading.

The stock’s decline was primarily driven by a mixed Q4 earnings result and weaker-than-expected Q1 2025 guidance. LC missed EPS estimates by only $0.01, while revenue actually exceeded expectations by $10.73M. In Q4, loan originations fell sequentially to $1.85B from $1.91B. Adding to investor concerns, Q1 2025 guidance projected loan originations of $1.8–$1.9B, below the forecasted $2.01B.

Despite the market reaction to short-term challenges, LendingClub maintains strong fundamentals and reported the following positive results:

  • A strong liquidity position of $3.3B.

  • Growing book value per share at $11.83 vs. $11.34 Y/Y.

  • 13% growth in originations, 17% growth in revenue, and 20% growth in total assets Y/Y.

  • Successful execution of a $400M loan sale to a new bank buyer.

  • Projected loan originations to exceed $2.3B by Q4 2025.

Given the company’s strong fundamentals and clear growth trajectory, the recent stock decline may present an attractive entry point for long-term investors.

Brinker International Reaches New Heights

Shares of Brinker International, Inc. (EAT) hit a record high following exceptional FQ2 results, driven by portfolio company Chili’s remarkable 31% increase in comparable restaurant sales, which significantly exceeded analysts expectations. Chili’s success can be attributed to comprehensive improvements in operations, menu upgrades, and successful marketing efforts around the popular “3 for Me” promotion.

"Chili's sales comps accelerated to +31%, driven both by new guests trying Chili's and return guests coming more frequently despite a more competitive promotional environment. These results would indicate we are building a much stronger business for the long term," Brinker CEO Kevin Hochman said in the earnings report.

Brinker’s financial performance significantly exceeded analysts expectations, which saw a 26% increase in revenue and tripled its profitability year-over-year. The company substantially raised its FY2025 guidance, projecting sales of $5.15B–$5.25B (up from $4.70B–$4.75B) and earnings per share of $7.50–$8.00 (increased from $5.20–$5.50).

Concluding Summary

LendingClub Corporation experienced an 18% decline by mid-day trading on Wednesday following mixed Q4 earnings results and lower-than-expected guidance. Despite the current challenges, the company has reported an optimistic growth trajectory, projecting loan originations to reach $2.3B by Q4 2025. Shares of Brinker International climbed 15% following a blowout earnings result, with revenue climbing 26% and profitability nearly tripling. Brinker substantially raised its FY2025 guidance, and the strong results and optimistic outlook triggered the stock price to reach a new record high during regular trading hours.

We have many stocks with strong buy recommendations, and you can filter them using Stock Screens to suit your specific investment objectives. We’ll continue to keep you updated on stocks like LC, and don’t forget to register for February’s first Alpha Pick stock selection on Monday, February 3rd, at 4:00 PM Eastern Time.

Written by Steven Cress, VP of Quantitative Strategy at Seeking Alpha.

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