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

Core Insights - OppFi (OPFI) is optimistic about the long-term scalability of its Loan Origination Lending Application (LOLA), which is designed to leverage rapidly evolving AI tools in various operations. Testing is planned for Q4 2025, with migration expected in Q1 2026 [1][8] Group 1: Operational Performance - The auto-approval rate for OppFi increased to 79% year-over-year in Q3 2025, contributing to revenue growth and margin expansion by reducing the need for human interaction [2][8] - OppFi experienced a year-over-year decline of 490 basis points in the percentage of expenses to revenues in Q3 2025, indicating improved operational efficiency, which is expected to enhance further post-LOLA migration [4][8] Group 2: Financial Outlook - The CEO is optimistic about generating double-digit revenue and adjusted net income growth in 2026, despite potential operational risks associated with the transition to LOLA [3] - OppFi's stock has decreased by 9.1% over the past year, compared to an 11.9% decline in its industry, while its peer Global Payments has seen a 30% decline [5] Group 3: Valuation Metrics - OppFi trades at a forward 12-month price-to-earnings ratio of 5.87X, which is lower than Cantaloupe's 23.01X but higher than Global Payments' 5.41X [9] - The Zacks Consensus Estimate for OppFi's earnings per share remains unchanged at $1.57 for 2025 and $1.71 for 2026 [12]