OnDeck, LendingClub Showing Signs Of Life

After a horrendous first half of the year for online lenders LendingClub Corp LC and On Deck Capital Inc ONDK, one of the two stocks may finally be showing some signs of life. On Deck shares are surging 15 percent in Tuesday’s session after the company reported Q2 earnings of -$0.20 on revenue of $69.5 billion, beating consensus expectations of -$0.27/$67.65 billion.

LendingClub, on the other hand, is down another 3.7 percent on Tuesday after the company reported Q2 EPS of -$0.09 on revenue of $102.39 billion, well short of consensus estimates of -$0.01/$108.03 billion.

To make matters worse, LendingClub CFO Carrie Dolan announced she is stepping down, a move that adds to the market perception that the company lacks direction.

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After seven consecutive quarters of at least 86 percent year-over-year revenue growth, LendingClub’s revenue grew just 7 percent in Q2, a huge dropoff. On Deck delivered 10 percent revenue growth on the quarter.

The most telling metric in Q2 for the two companies may have been loan origination. LendingClub reported a 2.6 percent year-over-year increase in loan originations in Q2 as the company focused on improving asset quality, increasing rates and tightening credit.

On Deck, meanwhile, delivered a 41 percent increase in loan originations and a 47 percent year-over-year increase in loans under management.

Despite the two stocks’ post-earnings divergence on Tuesday, On Deck and LendingClub remain down 41.2 percent and 57.5 percent, respectively, in 2016.