Enova topped Q2 profit estimates as consumer loan demand rose 15% YoY. The fintech lender held charge-offs steady at 5.8% and guided Q3 revenue in line with consensus. Shares rose 4.3% after hours.
Enova International shares rose after the company reported second-quarter profit that topped analyst estimates, driven by stronger consumer demand for its online lending products.
The Chicago-based financial technology firm posted adjusted earnings of $1.82 per share for the quarter ended June 30, compared with the $1.67 consensus estimate compiled by Bloomberg. Revenue rose 12% from a year earlier to $625 million, also ahead of expectations.
Enova's consumer segment, which includes its CashNetUSA and NetCredit brands, saw loan originations climb 15% year over year, the company said. The increase came as more borrowers turned to non-bank lenders amid tighter credit conditions at traditional banks.
“We saw particularly strong demand from near-prime and prime consumers, who are finding fewer options at major banks,” Chief Financial Officer Steve Cunningham said on the earnings call. The company's net charge-off rate, a key measure of loan performance, held steady at 5.8%.
Enova's small-business lending unit also contributed, with revenue up 8% from a year earlier. The company said it expects third-quarter revenue of $630 million to $640 million, roughly in line with the $635 million analysts had projected.
The stock, which has gained about 18% this year, added 4.3% in after-hours trading following the release. Enova carries an Alpha Score of 70 out of 100, a Moderate rating that reflects its solid earnings momentum against sector-average valuation multiples.
The company maintained its full-year outlook for revenue growth of 10% to 12% and adjusted earnings per share of $7.20 to $7.60.
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