Analyst David Scharf of JMP Securities maintained a Buy rating on Oportun Financial (OPRT – Research Report), with a price target of $6.50.
David Scharf’s buy rating for Oportun Financial (OPRT) is based on several considerations, although the company’s recent performance and projections have been less than stellar. The company’s third quarter results and year-end guidance were generally more negative than its peers, with a significant credit miss, a series of staff reductions, slower originations, and a withdrawal from several new product initiatives. Despite these challenges, Scharf sees value in the company’s commitment to downsizing its expense structure and its success in securing multiple new funding sources.
Scharf’s buy rating is primarily driven by valuation considerations. He believes that OPRT’s stock is undervalued, with the stock projected to open at less than 50% of its tangible book value. Despite the company’s ongoing credit struggles and a lack of clarity regarding the timing of peak loss rates, Scharf believes that there is a robust secondary market for OPRT’s paper, which he thinks is worth more than fifty cents on the dollar. Consequently, he has lowered his price target for the company to $6.50 from $9, but maintains that the company’s fair value accounting and asset valuation, as well as its transition into a smaller story moving forward, justify a discount to book value.
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Oportun Financial (OPRT) Company Description:
Oportun Financial Corp. is a holding company, which engages in the provision of financial services for customers with credit invisibles. The firm offers small dollar, unsecured installment loans through its proprietary lending platform. The company was founded in August 2005 and is headquartered in San Carlos, CA.
Read More on OPRT:
- Oportun Reports Third Quarter 2023 Financial Results
- OPRT Earnings Report this Week: Is It a Buy, Ahead of Earnings?
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