Oportun Financial (US:OPRT) ZACKS·2025-06-19 14:45Core Insights - Oportun Financial (OPRT) is utilizing technology, specifically artificial intelligence (AI) and machine learning (ML), to enhance its underwriting standards and provide personalized customer service [1][9] - The company has improved its V12 credit model by incorporating data from the inflationary period, which aligns with conservative credit standards [2] - OPRT's annualized net charge-off (NCO) rate decreased to 12% in 2024 from 12.2% in 2023, although it rose to 12.2% in Q1 2025 due to a reduction in back-book loan exposure [3] - The lending database allows OPRT to scale operations efficiently with minimal infrastructure investment [4] - OPRT's technological advancements provide a competitive edge over traditional lending peers, enabling rapid market share growth and cost efficiency [5] Industry Comparison - Peers such as Enova International, Inc. (ENVA) and Regional Management Corp. (RM) are also leveraging technology to enhance credit underwriting capabilities [6] - Enova employs The Colossus Analytics Engine, with approximately 90% of its models being ML-based [6] - Regional Management has improved its technological infrastructure, achieving a delinquency rate of 7.1% in Q1 2025 [7] Financial Performance - OPRT's shares have increased by 80.4% this year, contrasting with a 6.3% decline in the industry [8] - The company trades at a price-to-book ratio of 0.72, significantly below the industry average [10] - Zacks Consensus Estimate indicates OPRT's earnings growth of 63.9% and 39.2% for 2025 and 2026, respectively, although estimates have been revised downward recently [12]