OnDeck (NYSE: ONDK) rose 4.52% on the day despite no news during trading hours. The company announced after trading that its CEO, Noah Breslow, would be participating in the JMP Securities Technology Conference on February 26 in San Francisco.
The stock is down approximately 20% from its 2019 high despite reporting recording earnings last week for the full year of 2018. Most significant was that their cost of funds dropped despite interest rates in the economy rising. OnDeck’s average cost of funds was 5.6% in Q4 2018 compared to 6.8% in Q1 the same year.
Stock analysts have tired of the stock. Once heralded as a high-growth fintech disrupter, the company now more closely identifies as a non-bank subprime lender. On February 8th, Compass Point Research & Trading, LLC announced that they would no longer even follow the company.
“We are dropping coverage of ONDK due to a reallocation of resources. Our final rating and price target are Neutral and $10, respectively, ” Compass Point said in a newsletter. “While we see longer-term potential from the JPM and other partnerships, the company’s near-term earnings power remains somewhat constrained and competitive and credit risks remain elevated.”
As record earnings and decreasing borrowing costs are at this point unable to excite investors, expect short-term volatility. The company’s business model has yet to be tested in a recession since going public in 2014.