- Raymond James on Monday downgraded Open Lending ( NASDAQ: LPRO ) to Outperform from Strong Buy after the company's disappointing Q1 guidance issued last week as well as its fourth-quarter earnings falling well below Wall Street expectations .
- However, the firm still remains positive on LPRO, down 67.5% Y/Y, partly due to "very attractive" long-term fundamentals including a sizable total available market and more than 60% adjusted EBITDA margin, according to a note written to clients.
- Also, LPRO "is simply too inexpensive for the longer-term growth potential (trading at just 9x macro depressed 2024E EBITDA), and 3) we believe there is potential optionality for LPRO as a takeout candidate."
- LPRO appeared unbothered by the downgrade, rising 1.3% in Monday morning trading.
- The Outperform rating diverges from the Quant system rating of Hold but agrees with the average analyst rating of Buy.
- In its Q4 earnings call, CEO Keith Jezek talked about how LPRO was impacted by what he described as the temporarily challenging auto loan sector backdrop .
For further details see:
Open Lending loses top bull rating at RayJay after earnings upset