Is LOLA Migration Paving Path to OppFi's Long-term Success?

OppFi OPFI is optimistic about the long-term scalability of the Loan Origination Lending Application (LOLA). The CEO stated that LOLA will serve as a clean architecture made to take advantage of swiftly developing AI tools in originations, servicing and corporate operations. The company plans to test it throughout the fourth quarter of 2025 and eventually migrate it in the first quarter of 2026.

One of the early success indicators of LOLA includes increased automated approval, which serves as the driving force behind OPFI’s top-line gains and margin expansion. In the third quarter of 2025, auto-approval rates increased to 79% year over year, which not only improved revenues but also reduced expenses by lowering human interaction. Therefore, an enhancement in the auto-approval will provide a significant bump in OPFI’s ability to improve credit quality.

Although the path to success might appear clear, the company might have to shoulder operational risks. The pivot to LOLA requires careful execution to mitigate disruptions. Despite the potential risks, the CEO is highly optimistic about OppFi’s ability to generate double-digit revenues and adjusted net income growth in 2026.

OppFi is known to cater to the population with high credit risks. Therefore, the combination of LOLA and Model 6.1 refit will improve precision to assess credit quality, improving loan volume. In the third quarter of 2025, OppFi registered a year-over-year decline of 490 basis points in the percentage of expenses to revenues, which can further improve post LOLA migration. Considering the successful implementation of this technology, we expect OPFI to maintain high margins, serving well in its future performance.

OPFI’s Price Performance, Valuation & Estimates

The OppFi stock has lost 9.1% in a year against the 11.9% fall in its industry. OPFI’s industry peer Global Payments GPN has declined 30%, while Cantaloupe CTLP has gained 33.6%.

1-Year Share Price Performance

From a valuation perspective, OPFI trades at a forward 12-month price-to-earnings ratio of 5.87X, lower than Cantaloupe’s 23.01X, while trading at a premium compared with Global Payments’ 5.41X.

P/E - F12M

OppFi and Global Payments have a Value Score of A, while Cantaloupe carries a Value Score of C.

The Zacks Consensus Estimate for OppFi’s earnings per share for 2025 and 2026 has been unchanged at $1.57 and $1.71, respectively, over the past 60 days.

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

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

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