OppFi Jumps 46% in a Year: Should You Buy the Stock Right Now?

Core Insights - OppFi Inc. (OPFI) shares have increased by 45.5% over the past year, significantly outperforming its industry, which saw an 11.1% decline, and the Zacks S&P 500 Composite, which rose by 14.1% [1][4] - The company's year-to-date performance also shows a gain of 29.8%, compared to declines of 18.3% for Corpay and 27.3% for International Money Express [4] Financial Performance - OPFI's operational efficiency has been enhanced through AI and machine learning, resulting in an auto-approval rate increase to 79.1% in Q3 2025 from 76.8% in the same quarter last year [5] - Total expenses as a percentage of total revenues decreased by 500 basis points year-over-year and 300 basis points quarter-over-quarter, contributing to a 136.9% increase in net income year-over-year and a 561.4% rise from the previous quarter [6][8] - The company has consistently raised its FY25 adjusted EPS outlook, now projected between $1.54 and $1.60 [7][12] Risk Management - OPFI has implemented Model 6 to differentiate customers across risk segments, although there was an 80-basis-point increase in net charge-offs as a percentage of total revenues year-over-year [8][9] - The upcoming rollout of Model 6.1 aims to better identify riskier borrowers, with full implementation expected by Q1 2026 [9] Guidance and Estimates - Management has raised its guidance for adjusted net income from $95-$97 million in Q4 2024 to $137-$142 million in Q3 2025, reflecting a positive outlook [10][12] - The Zacks Consensus Estimate for OPFI's 2025 revenues is $598 million, indicating a 13.6% year-over-year growth, with earnings per share expected to surge by 65.3% [16][17] Valuation - OPFI is currently priced at 5.9 times forward 12-month earnings per share, significantly lower than the industry average of 20.6 times, making it an attractive investment opportunity [13] - The trailing 12-month EV-to-EBITDA ratio stands at 5 times, compared to the industry average of 11.2 times [13] Investment Recommendation - The combination of improved profitability through technology, consistent guidance increases, and attractive valuation metrics positions OPFI as a compelling buy for investors seeking long-term capital gains [18][19]