Can OppFi Manage Its Customers' Credit Quality as Originations Rise?

OppFi’s OPFI total net originations rose by 12.5% year over year during the third quarter of 2025. This metric improved 5.2% from the preceding quarter. This trajectory led toward improving the top line by 13.5% year over year. However, it did raise the question of whether the company could maintain the credit quality of its customers since nearly 50% of originations came from the new ones.

During the third quarter of 2025, OPFI registered a net charge-off as a percentage of total revenues at 35.1%, up 80 basis points (bps) from the year-ago quarter. On the same note, net charge-off as a percentage of average receivables moved up 60 bps year over year. OPFI depicts a stained picture of its credit quality on both counts. However, management assured that the elevated risk was taken into account for its loans.

The long-term figures paint a different picture. For the nine months ended Sept. 30, 2025, the net charge-off as a percentage of total revenues plummeted 430 bps, and the net charge-off as a percentage of average receivables declined 480 bps. The decline in this longer time frame hints at an improving loan quality relative to revenue generation, suggesting robust risk mitigation despite higher customer influx.

OppFi’s success at managing customer credit quality is evidenced by its profitability position, with adjusted net income soaring 41.4% year over year during the third quarter of 2025. This lofty growth shines a light on the profitable nature of the new customer cohort despite the elevated risk. Management hiked the adjusted net income outlook for 2025 to $137-$142 million from the preceding quarter’s view of $125-$130 million, underscoring confidence in the company’s credit risk mitigation strategy.

OPFI’s Price Performance, Valuation & Estimates

OppFi stock has gained 20.7% in the past year, significantly outperforming its industry’s 14.2% decline. However, the stock underperforms its industry peers, Futu Holdings FUTU and Dave DAVE, which have surged 86.9% and 111.6%, respectively, during the same timeframe.

1-Year Share Price Performance

From a valuation standpoint, OPFI trades at a 12-month forward price-to-earnings ratio of 5.43, lower than the industry’s 19.47. OppFi is significantly cheaper than Futu Holdings’ 15.93 and Dave’s 14.81.

P/E - F12M

OppFi has a Value Score of A, while Futu Holdings and Dave carry a Value Score of B and D, respectively.

The Zacks Consensus Estimate for OppFi’s earnings for 2025 and 2026 has increased 10.6% and 15.5%, respectively, over the past 60 days.

OPFI currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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