Needham & Company Downgrades On Deck Capital (ONDK) to Hold
Needham & Company downgraded On Deck Capital (NYSE: ONDK) from Buy to Hold.
Analyst Mayank Tandon commented, "We are downgrading ONDK to a HOLD from a BUY following a disappointing 1Q, sharp reduction in guidance, and increased uncertainty on the path to profitability for the company. ONDK missed 1Q estimates on slower growth in loan originations, with a lower mix of Marketplace loan sales weighing disproportionately on EBITDA losses. These same factors combined with higher funding and provision costs are anticipated to weigh on the balance of FY16 and are the reasons for the sharp reduction in FY16 guidance. Accordingly, we are cutting our FY16 and FY17 estimates. Although we believe the SMB online lending space represents a large and underserved market opportunity, the lack of clarity on the sustainable growth prospects and margin levels for ONDK leads us downgrade the shares to a Hold."
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Shares of On Deck Capital closed at $8.30 yesterday.