OPFI Stock Jumps 36% in a Year: Should You Hold or Fold Now?

OppFi Inc. OPFI shares have risen 36.3% over the past year. It has outpaced the 7.9% decline of its industry and 18.4% growth of the Zacks S&P 500 Composite.

1-Year Share Price Performance

Let us delve deeper to conclude whether this stock is still worthy of investors’ portfolios.

OppFi’s Credit Quality Improves With Rising Originations

In the third quarter of 2025, OPFI’s total net originations gained 5.2% sequentially and 12.5% year over year. As the top line improved on the back of rising originations, questions revolving around credit quality peaked as nearly 50% of originations came from the new ones.

The long-term picture surrounding credit quality is pretty bright. For the nine months ended Sept.30, 2025, the net charge-off as a percentage of total revenues tanked 430 basis points (bps). The net charge off as a percentage of average receivables showed a similar trend as the metric took a nose dive of 480 bps. It highlights improving loan quality as the top line increased, hinting at effective credit risk mitigation despite rising customer count.

The company’s profitability position spoke volumes about credit quality as adjusted net income surged 82.7% for the nine months ended Sept. 30, 2025, reflecting the profitable nature of the expanded customer base. Management’s proactive nature of raising adjusted net income guidance for 2025 to $137-$142 million in the third quarter of 2025 from the preceding quarter’s view of $125-$130 million shines light on management’s confidence in OPFI’s credit risk mitigation strategies.

OppFi Is a Value Play: Trades Cheaper Than Industry

OPFI is priced at 6.04 times forward 12-month earnings per share, substantially below the industry average of 20.5 times. On a similar note, the company’s trailing 12-month EV-to-EBITDA ratio is 5.07 times, trading at a discount compared with the industry average of 11.21 times. These metrics validate OPFI’s undervaluation, appealing to value-based investors.  

OPFI’s Encouraging Top & Bottom-Line Outlook

The Zacks Consensus Estimate for OPFI’s 2025 revenues is at $598 million, implying 13.6% year-over-year growth. For 2026, the top line is expected to rise 9.1%. The consensus estimate for OPFI’s 2025 earnings per share is $1.57, indicating a 65.3% year-over-year jump. For 2026, the bottom line is anticipated to grow 8.6%.

OPFI’s Challenges: Credit Default Risks & Competition

OPFI has turned out to be a gem for subprime/non-prime borrowers, which attracts the risk of credit default. Per Experian, 28% of consumers with credit scores within 580-669 face the risk of becoming seriously delinquent in the future. Considering OPFI’s motivations to serve customers with a credit score of below 650 and diving deeper into the pool of subprime/non-prime customers, the risk of credit default spikes naturally.

Alongside this risk, OppFi operates in a fiercely competitive market facing challenges from SoFi SOFI and Dave DAVE. Dave operates in a low-cost model, attracting customers with its low-interest products. Furthermore, Dave’s subscription-based model boosts user growth, paving the way for faster market share capture.

SoFi, being a vast and diversified company, can move down the credit route. Considering that SoFi introduces low-cost banking services to the underserved, OPFI might have to wash its hands of a significant chunk of the market share.

Hold OppFi for Now

We recommend investors hold the stock for now as OPFI’s financial prowess is challenged by the inherent risk of credit default. While the company has successfully improved its credit quality and profitability, operating in the subprime/non-prime market raises the risk of delinquencies.

Although management’s optimism surrounding profitability is appealing to investors, OPFI shoulders immense competitive pressure from SoFi and Dave, posing a threat to its market share. Hence, investors are advised to maintain their current positions rather than increasing exposure.

OPFI has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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