LPRO - Open Lending stock slides 9% after Morgan Stanley downgrades on headwinds

• Open Lending ( NASDAQ: LPRO ) stock is dropping 9.9% in Monday premarket trading after Morgan Stanley analyst James Faucette downgraded the company to Underweight from Equalweight as deteriorating subprime auto credit performance weighs on the auto lending ecosystem.
• Open Lending ( LPRO ) provides lending enablement and risk analytics software to credit unions, regional banks, and non-bank auto finance companies. While the LPRO management said they expected an ongoing increase in certified loan growth throughout 2022, "we expect still elevated used care prices and accelerating affordability issues given rising interest rates, particuilarly for subprime borrowers, to significantly impair the company's ability to meet expectations," Faucette wrote in a note to clients.
• Subprime auto credit performance has reverted to 2017-'18 levels, already, weighing on Open Lending's ( LPRO ) Profit Share segment, he pointed out.
• Note that in March, SA's Quant rating system, which consistently outperforms the market, warned that LPRO was at risk of performing poorly.
• During the company's last earnings call, management reaffirmed 2022 guidance for 2022 revenue of $210M-$240M and adjusted EBITDA of $135M-$160M.

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