OppFi Raises EPS Guidance for 2025: Is This Expectation Valid?

OppFi OPFI strengthened its 2025 adjusted earnings per share (EPS) in the first quarter of 2025, signaling optimism in its operational capabilities and market positioning.

The leading fintech platform raised its EPS guidance following the impressive first-quarter 2025 results, wherein the company reported 38 cents, which skyrocketed 277.5% from the year-ago quarter. Management hiked the EPS guidance to $1.18-$1.26 from the preceding quarter’s view of $1.06-$1.07. This upward revision is based on an expected weighted average share count of 90 million, reflecting management’s increased expectations for future profitability.

Several compelling metrics led to this optimistic trajectory. In the first quarter of 2025, the top line improved 10.1% year over year. This growth had a positive impact on the adjusted net income, resulting in a 285.1% year-over-year upsurge. Net originations increased 16% from the year-ago quarter. Improvement in OPFI’s credit quality was evidenced by a significant decline in the net charge-off rate as a percentage of total revenues to 34.6% from the year-ago quarter’s 48%. The company’s effective revenue generation capability was demonstrated by an improvement in the average yield on the loan portfolio to 136%.

In terms of credit risk enhancements, OPFI has been refining its credit modeling consistently, using advanced machine learning models. These models improve risk assessment, cater to charge-off risks and capture higher-quality borrowers, leading to enhanced credit performance and loss reduction. Improved operational efficiency, fueled by disciplined cost management and technological advancements, allows the company to scale operations effectively without a surge in expenses. Strong loan demand and a healthy credit performance bolster OppFi’s internal strength.

The combination of strong demand for OPFI’s products and an environment wherein borrowers are meeting obligations add to the company’s long-term sustainability and ability to thrive profitably. This strengthens management’s confidence in OppFi’s financial success in 2025, leading to an upgrade in the EPS guidance.

OPFI’s Price Performance, Valuation & Estimates

The stock has skyrocketed 308.3% in the past year, significantly outperforming its competitors, Green Dot GDOT, FirstCash FCFS, and the industry as a whole. The industry and FirstCash have rallied 29% and 11.2%, respectively. Green Dot did not observe price change over the past year.

1-Year Price Performance

From a valuation standpoint, OPFI trades at a forward price-to-earnings ratio of 10.29, lower than the industry’s 23.39. Green Dot trades at 7.37 and FirstCash hovers at 14.93. All three companies have a Value Score of A.

The Zacks Consensus Estimate for OppFi’s earnings for 2025 has increased 14.9% over the past 30 days.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research