BUZZ-LendingClub slumps after Q1 outlook falls short of expectations

Shares of digital bank LendingClub LC.N fall 23.4% to $12.90 premarket

LC late Tuesday forecast Q1 loan originations between $1.8 bln to $1.9 bln and pre-provision net revenue of $60 mln to $70 mln

JPM says Q1 forecast was a touch lighter than expected hurt by normal seasonal softness and increased marketing spend, which appears to have spooked traders

KBW says investors were clearly holding expectations for a much stronger outlook, but believes the reaction to be overblown as LC has historically been extremely conservative with its forecast

Brokerage believes there could be material upside to LC's forecast if the Fed were to cut more aggressively given the firm's current outlook assumes only a single 25 basis points rate cut in the back half of 2025

LC stock soared 85.2% in 2024