Needham & Company Raises Price Target on Yirendai (YRD) to $38 Following 3Q
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Needham & Company reiterated a Buy rating on Yirendai Ltd. (NYSE: YRD), and raised the price target to $38.00 (from $35.00), following the company's 3Q earnings report. Revenue of $131.5 million was up 19.1% Q/Q and 137% Y/Y, ahead of $125.8 million estimates. The company also reported $0.85 in EPS, well above $0.27 estimates. The outperformance is driven in part by a tax benefit resulting from a YRD subsidiary qualifying for exemption of enterprise income tax for 2015 and 2016.
Analyst Mayank Tandon commented, "YRD continued the trend of strong performance in FY16, reporting 3Q results that handily beat estimates on both the top and bottom line. Management raised guidance on both revenue and EBITDA for FY16, reflecting the continued strength in loan volume. The company remains optimistic that regulation of the Chinese online lending industry will drive healthy development, and maintains confidence in its ability to strengthen its competitive position. We continue to believe that YRD is well positioned as a beneficiary of increased regulation and consolidation in the industry, given its brand, scale, and risk-management capabilities. We are raising our estimates to reflect the strength of the results and a lower tax rate going forward. Our new price target is $38, and our rating remains BUY."
Shares of Yirendai Ltd. closed at $30.30 yesterday.
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