Verdict: TOO HARD (confidence 2/5) · price $5.93 on 2026-10-09 · tranches $5.00 / $4.00 / $3.00 (placeholders, only if the owner overrides) · trim above $12 OppFi makes short-term, high-rate loans to subprime borrowers through bank partners. The screen shows a 5x P/E, a $66 Payback and a $29 Sticker, but for a lender, operating cash flow leaves out the cash lent out, so FCF and owner earnings are overstated. ROIC (2.7%) says the business is not a Rule #1 compounder on the numbers. Q2 2026 missed, guidance was cut, and I have not read the 10-K. Research, not advice.
R · Radar
- Screen: BUY, tier A, rank 6.49, 3 methods agree on the screen's numbers, 49% below the 52-week high, price/Sticker 0.20. Flags: financial (OCF tests less meaningful), micro-cap. Marker score 0.57.
- Events: 8 Form 4s ($0.22M insider buying; press reports the CEO bought in early September and another insider sold 77,850 shares in August [3]). 8-K 2026-09-21: item 2.03, a new debt obligation (details not read). 13D/A on 2026-04-30. No Radar items. No gurus in the 13F data (13F lag ~4 months).
- Street: 4 analysts (1 strong buy, 1 buy, 1 hold; rating score not available), targets $11 / $13.32 / $16 (as of 2026-10-10); Piper Sandler and Zacks downgrades are reported [3]. The mean is just below the screen's MOS ($14.54) and far below its Sticker ($29), so the street does not back the screen's price. Street EPS growth: −11% this year, +36% next. Signal: mixed. I do not use targets for value.
U · Understand
- The business in one sentence: OppFi runs an online platform that makes high-interest installment loans to people with poor credit, using partner banks to originate them.
- Money: interest and fees on loans. Q2 2026 revenue $145.2M (+1.9%); originations $212M (−9.3%) after tightened underwriting; net charge-offs rose to 40% of revenue from 32% [1][2]. Segment split: not found. Rivals: Enova, Oportun, LendingClub, payday lenders and card issuers. Hook: speed and approval for people who can't get bank credit; no evidence of lock-in.
- Weather: consumer credit cycle, interest-rate-cap proposals, scrutiny of bank-partner lending models (OppFi-specific legal items not researched). A planned bank acquisition (BNC/BNCCORP, expected to close Q4 2026) changes the regulatory picture [2].
- Circle of competence: 2/5. To learn: loan-loss reserve policy, bank-partner contract terms, funding costs, the BNC deal.
L · Love (moat and management)
- Moat: an underwriting and data edge, unproven. Replication test: other online lenders can do the same. Disappears test: borrowers would switch. ROIC (
history_usd): 15.5% in 2020, then 1–4% in 2021–25. A lender with returns that low has no demonstrated pricing power. - Management: founder-led. Shares rose from ~16.9M (2021) to ~26.5M (2025) per the fact pack (dual-class structure may distort this). Debt is $50M on the screen but a lender's funding debt sits elsewhere (not checked); the September 8-K shows new debt. Proxy and incentives: not found. Candour: unconfirmed.
- Values: high-cost credit for subprime borrowers. The owner decides.
- Would I buy the whole company at this price? Unknown: ~$0.5B for earnings that depend on loss rates I can't assess.
E · Event
- What happened: 10 Aug 2026 Q2 print: adjusted EPS $0.33 (vs ~$0.44–0.48 expected, $0.45 a year earlier); 2026 guide cut to revenue $600–625M and adjusted EPS $1.34–1.51 (was $1.76–1.84) [1][2]. New 52-week low on 5 Oct [3]. A specific cause for the September fall: not found.
- Event checks (METHOD 7):
- Known: ✔ underwriting tightening and higher losses.
- Easy to find: ✔.
- Needs at least a year: ✔ probably.
- Resolves within ~3 years: ? the $3 EPS target for 2028 is management's.
- No new debt needed: ? a new debt obligation was filed 21 Sep.
- You would own it for life: ✘ not at this competence level.
- Event or problem? Closer to a problem in a business I can't value: losses are rising and growth has stalled. Not an event under METHOD 7.
R · Reduce basis (tranches only, no options)
| Tranche | Price | Basis | Status |
|---|---|---|---|
| 1 | $5.00 | ~3.5x guided adjusted EPS midpoint ($1.42), a big haircut for credit risk | Not triggered (price $5.93) |
| 2 | $4.00 | ~3x guided adjusted EPS | Not triggered |
| 3 | $3.00 | ~2x guided adjusted EPS | Not triggered |
The screen's plan ($29 / $14.5 / $12.4, all triggered) is not used: it rests on OCF-based Payback and Ten Cap that ignore the cash lent out. The verdict is TOO HARD, so these are placeholders if the owner chooses to override. Equal dollar tranches; keep dry powder for a further ~50% fall. Stop buying above $5. Trim above $12.
S · Story
- Thesis: if tighter underwriting brings losses back down and OppFi reaches management's $3 EPS target for 2028, the stock is very cheap. That is management's case; I cannot confirm it.
- Three things that must stay true: (1) net charge-offs fall back from 40% of revenue; (2) the bank-partner model survives regulation; (3) funding costs stay well below loan yields.
- Inversion: bear case: losses keep rising, rate-cap rules cut revenue, and the bank deal adds capital demands. Concession: guidance was just cut and nothing shows losses have peaked. Partial rebuttal: recoveries rose to $15M from $11M [2].
- Sell triggers (if owned): another guidance cut; charge-offs above 40% of revenue for two more quarters; equity raised at lower prices; a regulatory action against the bank partner.
Markers
- ?
roic_consistent: screen unknown; ROIC ≥10% in only 1 year shown (2020). I read it as ✘. - ?
roic_not_falling: no value; the history runs 15.5% down to 2.7%, so I treat it as ✘. - ✘
growth_coherent: sales, net income and OCF growth are 26 points apart. - ✘
margin_stable: 14-point variation. - ✔
fcf_margin(106% of revenue): override: not meaningful. Loan originations sit in investing cash flow, so OCF is overstated. - ✔
cash_real(3.9x): override: not meaningful for a lender. - ✔
low_debt(0.13 years): override: the screen counts only $50M of debt; funding debt not checked. - ✘
no_dilution: share count up ~12% a year. - ?
predictable: revenue rose in 5 of 6 years (0.83). - ✔
recession_tested: profitable in 2020 with ROIC 15.5%; later years were poor.
Numbers
| Item | Screen | My view |
|---|---|---|
| Sticker | $29.08 | Not usable: 5-year EPS growth is null; the 13.7% windage comes from revenue growth |
| MOS | $14.54 | Not usable |
| Payback | $66.64 | Not usable (OCF ignores cash lent) |
| Ten Cap | $48.95 | Not usable |
| Windage growth | 13.7% | Street EPS is −11% this year, so cut to zero until losses stabilise |
| P/E vs 10-yr median | 5.0 vs 28.2 | Median not meaningful (GAAP EPS near zero most years) |
| Owner earnings | $421.6M | Overstated |
| Net debt | −$14M | Excludes funding debt |
| Cash conversion | 3.9 | Not meaningful |
Guided 2026 adjusted EPS of $1.34–1.51 is 3.9–4.4x at $5.93, but adjusted EPS excludes costs; Q2 GAAP diluted EPS was $0.18 and TTM GAAP EPS on the screen is $1.18.
| FY | Revenue $M | EPS | OCF $M | FCF $M | ROIC % |
|---|---|---|---|---|---|
| 2019 | 114.9 | n/a | 148.9 | 142.3 | n/a |
| 2020 | 200.2 | n/a | 192.1 | 181.4 | 15.5 |
| 2021 | 263.7 | 0.80 | 167.3 | 153.0 | 1.4 |
| 2022 | 217.0 | 0.08 | 243.3 | 230.0 | n/a |
| 2023 | 273.2 | −0.02 | 296.1 | 287.2 | 4.2 |
| 2024 | 321.5 | 0.12 | 323.8 | 310.8 | 2.7 |
| 2025 | 381.2 | 0.33 | 401.3 | 382.2 | 2.7 |
No deep-dive model exists.
Sources
- OppFi Q2 2026 results, 8-K (SEC)
- OppFi Q2 2026 results and guidance (MarketBeat)
- OppFi shares down, downgrades, insider activity (MarketBeat, 15 Sep)
Figures came from search summaries of these pages; the 10-K and proxy were not read.
Changelog
- 2026-10-10: created. TOO HARD: the screen's cash-flow-based prices don't apply to a lender; Q2 guidance cut; 10-K, proxy and the September 8-K not read.