OPFI - OppFi: 83% Of Earnings Go To Non-Controlling Interest

2024-07-19 05:54:02 ET

Summary

• OPFI's management is yet to become confident in the company's underwriting algorithms. Loan defaults seem to have plateaued at pretty high levels.
• The company's failure to expand into new verticals beyond amortized loan offerings highlights challenges in scaling their underwriting algorithms, limiting revenue growth potential.
• 83% of earnings are attributable to non-controlling interest, distorting forward PE multiples.

Investment Thesis

OppFi ( OPFI ) is a consumer lending company that provides loans to low-credit-score borrowers. Recently, OPFI has been successful in driving earnings growth via improvements in its underwriting process and lowering operating expenses....

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