LPRO Stock Forecast & Price Target

Open Lending Corp's total revenue for the third quarter increased by 3% year-over-year to $24.2 million, surpassing forecasts by $2.3 million and consensus estimates by 9%. The company also reported a 22% year-over-year increase in adjusted EBITDA to $5.6 million, boosted by a $1.1 million positive adjustment to profit-sharing fee revenue, a notable improvement compared to the $7.0 million reversal in the prior year. Furthermore, the announcement of a partnership with a third automotive OEM to utilize its Lenders Protection Program underscores the company's potential for capturing a larger market share in the automotive lending sector, particularly among near-prime and non-prime borrowers.

Open Lending Corp's recent financial performance reveals a concerning trend, with total certified loans decreasing by 13% year-over-year to 23.9K, primarily driven by a 57% decline in loans from captive lenders of auto manufacturers. The company anticipates further declines in certified loans for the fourth quarter, projecting a decrease of 10% to 18% year-over-year, amidst ongoing challenges related to stricter underwriting practices and increased auto loan delinquencies. Additionally, declines in consumer confidence and spending, as well as a need to revise profit-sharing fee revenue downward, underscore substantial risks to Open Lending's revenue and earnings outlook.