Looking back on consumer finance stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Sallie Mae (NASDAQ: SLM) and its peers.

Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions.

The 20 consumer finance stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3%.

Luckily, consumer finance stocks have performed well with share prices up 11.5% on average since the latest earnings results.

Sallie Mae (NASDAQ: SLM)

Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ: SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college.

Sallie Mae reported revenues of $545.7 million, up 42.1% year on year. This print fell short of analysts’ expectations by 1.5%. Overall, it was a slower quarter for the company with a significant miss of analysts’ net interest income and EPS estimates.

Interestingly, the stock is up 4.1% since reporting and currently trades at $27.81.

Is now the time to buy Sallie Mae? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Nelnet (NYSE: NNI)

Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE: NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.

Nelnet reported revenues of $427.4 million, up 47.5% year on year, outperforming analysts’ expectations by 14.9%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.

Nelnet pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 5.7% since reporting. It currently trades at $137.20.

Is now the time to buy Nelnet? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Credit Acceptance (NASDAQ: CACC)

Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ: CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.

Credit Acceptance reported revenues of $405.1 million, up 5.9% year on year, falling short of analysts’ expectations by 19.6%. It was a slower quarter as it posted a significant miss of analysts’ revenue estimates.

Credit Acceptance delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $457.82.

Read our full analysis of Credit Acceptance’s results here.

Capital One (NYSE: COF)

Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE: COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.

Capital One reported revenues of $15.46 billion, up 54.4% year on year. This result topped analysts’ expectations by 2.7%. It was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest margin estimates.

The stock is up 13.5% since reporting and currently trades at $247.48.

Read our full, actionable report on Capital One here, it’s free for active Edge members.

LendingClub (NYSE: LC)

Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE: LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.

LendingClub reported revenues of $266.2 million, up 31.9% year on year. This print beat analysts’ expectations by 3.9%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

The stock is up 19.1% since reporting and currently trades at $19.68.

Read our full, actionable report on LendingClub here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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