On Deck Capital Slumps 35% After Earnings Miss And FBR Downgrade

Shares of On Deck Capital Inc. tumbled 35% Tuesday, after the online small business lender said first-quarter losses more than doubled, garnering a downgrade from FBR & Co. Analysts cut the stock to market perform from outperform, and said slower originations and loan sales mean it will take longer for the company to become profitable. On Deck reported a net loss of $13.14 million, or 18 cents a share, compared with a net loss of $5.34 million, or 8 cents a share, in the first quarter of 2015. The FactSet consensus was for a loss of 8 cents. Revenue rose 11% to $62.6 million, below the company's own range of $66 million to $69 million. Management reduced its 2016 EBITDA guidance by $50 million, "a significant amount for a company with $260 million of TTM revenues," said FBR. "We like ONDK's business model, particularly its ability to partner with banks to provide lending as a service, but the near-term volatility in earnings and lack of profitability are concerns," they wrote. Shares have fallen 72% in the last 12 months, while the S&P 500 has lost 2.3%.

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