LPRO - Open Lending stock skids down after guidance cut analyst downgrade

Open Lending ( NASDAQ: LPRO ) stock is dropping 11% in Friday premarket trading after the provider of lending risk software cut its 2022 guidance to account for an expected 20% Y/Y decline in auto loan originations.

It now expects 2022 total revenue of $175M-$205M vs. $210M-$240M previously and adjusted EBITDA of $110M-$135M from its prior view of $135M-$160M.

That prompted Stephens analyst Vincent Caintic to downgrade the stock to Equal Weight/Volatile from Overweight/Volatile.

"In hindsight, we should have heeded our read-through concerns when OEM incentives collapsed," the analyst wrote in a note to clients. "But we were optimistic that LPRO could still grow overall volumes because of bank/credit union wins."

Now, as interest rates rise and deposit gathering becomes more challenging, non-auto manufacturer partners are prioritizing other asset classes over Open Lending's ( LPRO ), he said. "We are thus not confident that bank/CU wins will offset industry sales which may be declining over 20% Y/Y unit-basis."

In March, SA's Quant system warned that Open Lending ( LPRO ) had a high risk of performing poorly due to valuation and decelerating momentum.

Still, Open Lending ( LPRO ) Q2 earnings and revenue beat Wall Street expectations

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