Can OppFi Manage Its Customers' Credit Quality as Originations Rise?

Core Insights - OppFi's total net originations increased by 12.5% year over year in Q3 2025, contributing to a 13.5% rise in revenue [1][9] - The company faces challenges in maintaining credit quality, with nearly 50% of originations coming from new customers [1] - Net charge-off ratios rose in Q3 2025, with net charge-off as a percentage of total revenues at 35.1%, up 80 basis points from the previous year [2][9] - Despite the elevated charge-off ratios, long-term trends show a decline in charge-offs, indicating improving loan quality [3][4] Financial Performance - Adjusted net income surged by 41.4% year over year in Q3 2025, prompting management to raise the income outlook for 2025 to $137-$142 million [4] - OppFi's stock has gained 20.7% over the past year, outperforming the industry average decline of 14.2% [5][9] - The stock trades at a forward price-to-earnings ratio of 5.43, significantly lower than the industry average of 19.47 [8] Valuation and Estimates - OppFi holds a Value Score of A, while competitors Futu Holdings and Dave have scores of B and D, respectively [10] - The Zacks Consensus Estimate for OppFi's earnings has increased by 10.6% and 15.5% for 2025 and 2026, respectively, over the past 60 days [10]