TipRanks Smart Growth Portfolio #37: Gifted Loans
Dear Investors,
Welcome to the 37th edition of the Smart Growth Portfolio and Newsletter.
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Portfolio Changes
❖ We are happy to announce the addition of Aviat Networks (AVNW) – which was recommended in one of our previous Newsletters – to the Smart Growth Portfolio.
We are adding Aviat following its strong fiscal Q1 2026 results, rising analyst conviction, and a structural shift in market attention that now favors high-quality communications infrastructure companies. AVNW was previously highlighted as one of our standout undervalued growth ideas, and the latest earnings confirm that the company is executing through both cyclical and structural tailwinds.
Aviat is a global provider of mission-critical wireless transport and access solutions used in public safety, utilities, private networks, rural broadband, and carrier backhaul. Its portfolio spans microwave radios, multiband systems, narrowband Aprisa solutions, private LTE/5G infrastructure, and a fast-expanding software suite anchored by ProVision Plus and AviatCloud. Over the past four years, Aviat has transformed itself from a specialized wireless-backhaul provider into a diversified industrial-grade communications platform through the acquisitions of Redline, 4RF, and NEC’s Pasolink business – expanding its global reach, product breadth, and recurring-revenue base.
Fiscal Q1 2026 reinforced why this transformation is working. Revenue rose 21.4% year over year to $107.3 million, a meaningful beat driven by strength in U.S. public safety and private networks. Adjusted EBITDA reached $9.1 million, non-GAAP EPS came in at $0.43 versus expectations near $0.38, and gross margin held firm despite a one-off $3.6 million hit that temporarily distorted net profit margin. Management reaffirmed full-year revenue guidance of $440-460 million and adjusted EBITDA of $45-55 million, reflecting confidence in both demand visibility and integration progress across recent acquisitions.
Critically, the underlying growth engine is expanding. U.S. public safety continues to scale, private wireless deployments remain robust, and early cross-selling from Aprisa and Pasolink is accelerating. The launch of the Presa LTE 5G router opens an $800 million U.S. vehicle-based opportunity within a $2.8 billion global market. International revenue timing remains uneven – as is normal for infrastructure cycles – but Aviat expects modest improvement as the year progresses. Management also sees room for 1-2 percentage points of gross-margin expansion by year-end as manufacturing transitions and mix shifts take hold.
Where Aviat stands out most is valuation. AVNW trades at roughly 0.7x forward sales despite consistent execution, improving profitability, and a balance sheet positioned for flexibility. That multiple is well below the 2.1x industry average and even below smaller peers that lack Aviat’s scale or portfolio breadth. Analysts have taken notice: in the days following earnings, B. Riley Securities, Roth MKM, and Northland Securities all reiterated Buy ratings and raised price targets. Consensus upside now approaches 44%.
While the stock is up 28% year to date, this gain hasn’t even begun to correct a deep undervaluation. For the past two years, markets have been fixated on shiny AI names – GPUs, cloud AI infrastructure, and enterprise software. Communications equipment quietly powered all of it but drew none of the attention. These companies modernized anyway, integrating advanced RF, automation, and AI-enhanced network software, yet traded as if they were stagnant industrials. Now that AI-centric valuations have become stretched, investors are rotating into the indispensable – but previously overlooked – infrastructure layer that actually enables AI, connectivity, and data movement. AVNW sits at the center of that shift: mission-critical, modernized, capacity-leveraged, and still fundamentally cheap. This is the phase where the market re-rates structurally strong operators that were ignored during the hype cycle.
For growth-oriented investors, Aviat offers a compelling combination of accelerating execution, expanding addressable markets, margin recovery potential, and one of the most attractive valuation profiles in the communications infrastructure space. With consistent beats, rising analyst support, and a long runway of private network and public-safety deployments, AVNW stands out as a timely, high-quality addition to the Smart Growth Portfolio.
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❖ We are selling Monday.com (MNDY) following its Q3 earnings release and guidance reset, which confirmed a narrative shift that the stock’s valuation cannot support.
The quarter itself was good – revenue up 26% YoY to $316.9 million, EPS ahead of expectations, FCF margins near 29%, and large-customer momentum continuing. Fundamentally, Monday.com remains a world-class software company with an exceptional product ecosystem.
But the stock’s premium rests on hypergrowth expectations, and that is where the break occurred.
Management guided Q4 revenue growth to 22-23% – a clear deceleration from 26% in Q3 and well below what analysts had expected for 2026. Operating margin guidance also softened to 11-12%, reflecting heavier go-to-market investment and the natural cost of scaling the platform. Nothing about the results was alarming, yet the message was unmistakable: Monday.com is shifting into a steadier, more profitability-balanced phase. That evolution is normal for a company of this size, but it requires a valuation reset before the next leg higher.
This is where the market balked. You cannot pivot investor psychology overnight. For years, Monday.com has been priced as a high-growth outlier – a company capable of sustained 25-30%+ ARR expansion with thick margins and a long upmarket runway. Q3 showed that while the long-term picture is intact, the near-term growth cadence is moderating, and investors immediately recalibrated. With the stock still trading at a premium multiple even after the drop, the market repriced the entire growth curve at once.
Product expansion played a meaningful role in this. The introduction of Monday CRM, Monday Dev, Monday Campaigns, and Monday Vibe materially broadens the platform and increases long-run addressable market – these moves are strategically sound. But in the near term, a wider suite means longer evaluation cycles, more fragmented ARR growth, and a sales motion that requires heavier GTM bandwidth. It’s excellent for the next five years, but it naturally pressures near-term ARR expansion and net dollar retention, both key inputs to SaaS valuation models.
The broader backdrop amplified the damage. SaaS valuations have been compressing all year, with a persistent overhang around “AI eating software” – the concern that AI-native productivity tools will deflate seat counts, weaken pricing power, or slow expansion revenue across the category. Monday.com has executed well on AI and has integrated intelligent workflows throughout the platform, but the overhang hasn’t been resolved. Until investors gain confidence that AI augments, not displaces, MNDY’s workflow footprint, the stock will struggle to regain its multiple.
Importantly, none of this undermines Monday.com’s fundamentals. Gross margins remain near 90%, free cash flow is scaling, the balance sheet is pristine, and enterprise adoption is accelerating. The company is not broken. The stock is simply undergoing a necessary valuation reset as its growth profile shifts toward a more durable – but slower – trajectory.
However, near-term visibility has deteriorated: revenue growth is decelerating, margin leverage is flattening, GTM costs are rising, and the AI-competitive narrative is unresolved. The stock now needs to establish a lower, growth-adjusted valuation base – and only then can a new uptrend form alongside scaling of the broader suite and more predictable upmarket traction.
Holding the stock here becomes a bet that sentiment turns before fundamentals re-accelerate – and that is not our modus operandi. We are exiting the position today. Monday.com remains a superb company with a long runway, but in the near term, headwinds outweigh the upside. We will revisit once valuation stabilizes, growth expectations reset, and the AI-productivity overhang begins to clear.
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Portfolio News
❖ Micron (MU) has surged by over 90% since its addition to the Smart Growth Portfolio on July 4, driven by strong analyst support reflecting confidence in the company’s positioning and profitability. Positive sentiment continues as investors anticipate sustained demand growth for memory chips in AI and data center markets, reinforcing the stock’s upward momentum despite recent sector volatility. Demand for MU’s chips continues to outstrip supply on AI-driven memory demand, with tight DRAM supply expected to continue over the next two years, while NAND demand is also accelerating, increased demand from hyperscalers for AI server deployments. Micron’s HMB market share is expected to continue rising thanks to strong product performance, improved capacity, and customer preference for its advanced chips. While competition is strong, Micron has an advantage as the only U.S. advanced memory producer, benefiting from favorable U.S. policy supports aimed at strengthening domestic semiconductor production.
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❖ Applied Digital (APLD) saw its stock drop as investors reacted to a wave of financing announcements, with the market’s response centered on balance-sheet optics and unfounded dilution fears – even though the company has just moved closer to resolving the core long-term concern that has shadowed it for more than a year: its ability to deliver contracted hyperscale capacity at utility-scale power levels.
The centerpiece is a proposed $2.35 billion senior secured notes offering. Applied will use the proceeds to fund two additional buildings at the Polaris Forge 1 AI Factory campus in Ellendale, North Dakota, retire an existing credit facility, seed debt-service reserves, and keep build-out momentum intact. The size of the raise – unusual for a company of Applied’s market cap – triggered immediate unease about leverage, interest expense, and execution risk. That reaction overshadowed the fact that the debt is tightly paired with long-term hyperscaler capacity commitments that provide multi-year revenue visibility, and that analysts reaffirmed bullish targets almost immediately after the announcement.
APLD also secured a $65 million revolving credit facility, adding flexible working capital for operating needs as construction scales. Revolvers are standard for companies entering multi-site build cycles, but in a skittish market, every new credit line is viewed through a leverage lens first.
The third component – and the one most misunderstood – is the expected release of a $787.5 million tranche under the existing $5 billion AI-infrastructure partnership with Macquarie. This tranche is structured as perpetual preferred equity, meaning no dilution to common shareholders. But because anything labeled “equity” tends to trigger reflexive dilution fears in small-cap tech, the market sold first and asked questions later. In reality, Macquarie’s capital strengthens the balance sheet and accelerates delivery of hyperscaler-contracted power, especially for Polaris Forge 2.
All three financing layers landed at once, creating a headline shock despite being part of a coordinated capital roadmap. Applied is in the middle of a multi-billion-dollar capital cycle designed to transform the company into one of the largest dedicated AI-compute infrastructure operators in North America. This financing stack is not a sign of distress – it’s the only viable architecture for building utility-scale AI campuses. These projects cannot be funded from operating cash flow; they require institutional debt, flexible working capital, and milestone-based equity capital working in tandem over the years.
Short-term volatility is likely as the market digests the scale of the raise. But the strategic picture is far clearer than it was just six months ago. The first 50 MW at Polaris Forge 1 is already Ready-for-Service, Polaris Forge 2 has 200 MW contracted to an investment-grade hyperscaler (with expansion rights up to 1 GW), and the company now has a financing framework that can actually deliver it. If APLD continues hitting milestones on schedule, the long-term story becomes increasingly difficult to ignore – positioning the company in the top tier of U.S. operators capable of executing utility-scale AI compute campuses, the same class of projects currently being driven by Meta, Microsoft, Amazon, and dedicated AI cloud providers.
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❖ Enova International (ENVA) announced a new $400 million share repurchase program, which replaces the previous $300 million plan and extends through June 2027. The increased buyback plan is seen as a strong sign of management’s confidence in the company’s growth prospects and capital return strategy.
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❖ MKS (MKSI) is seeing a wave of analyst praise following its stellar earnings report, with revenue and net income per share both at the upper end of guidance. The company’s strong execution in its core end markets and a solid outlook for Q4 have bolstered investor sentiment, while ongoing debt reduction adds confidence in financial management. Over the past week, Morgan Stanley, Citi, Deutsche Bank, Benchmark Co., J.P. Morgan, Needham, and Mizuho raised their price targets on the stock. Particularly, TD Cowen hiked MKSI’s price target from $125 to a new Street-high of $200, citing strong positioning to benefit from long-term growth trends in the semiconductor industry, especially in secular themes like AI data centers, advanced packaging, and others. Analysts highlighted the company’s solid fundamentals, disciplined cost management, strong free cash flow, and ongoing debt reduction, and said they believe MKSI is undervalued relative to its growth prospects.
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❖ Itron (ITRI) approved a new share repurchase program of up to $250 million, effective November 10, 2025, to be conducted over 18 months. This decision follows the completion of a previous buyback plan under which Itron repurchased ~$100 million worth of shares, fully utilizing the authorized capacity.
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Under Review
❖ We are placing Atlanticus Holdings (ATLC) under review following its Q3 earnings release.
Atlanticus delivered a mixed third quarter, combining exceptional portfolio growth with a disappointing revenue and earnings outcome. Total operating revenue climbed 41% year-over-year to $495.3 million – impressive at first glance but below analyst expectations – as accounting and mix effects muted growth. Net income fell slightly to $22.7 million from $23.2 million a year earlier, while adjusted diluted EPS came in at $1.48, missing consensus due to higher costs and a larger fair-value markdown on loans.
The revenue miss stemmed mainly from a bigger-than-expected reduction in the fair value of loans, which cut into reported revenue even though total loan balances expanded sharply. Under fair-value accounting, ATLC must re-estimate the present value of its loan portfolio each quarter based on projected cash collections, losses, and discount rates. When expected charge-offs rise, repayment slows, or market discount rates move higher, the current value of those loans falls – and that decline is booked as a reduction in revenue.
In Q3 2025, all those pressures converged. Loss assumptions ticked higher as newer accounts began to season, consumers took longer to pay amid stretched budgets, and lower-yield near-prime loans from the Mercury Financial acquisition diluted overall portfolio yield. At the same time, discount rates used in valuation rose slightly as credit-market spreads widened. The combination forced a steeper markdown, which explains why revenue missed estimates despite strong growth in receivables and accounts.
Funding and cost dynamics added further strain. Interest expense jumped 77% YoY to $75.5 million, reflecting a much heavier debt load and fixed-rate securitizations issued during the high-rate period of 2023-24. Although the Federal Reserve has been cutting rates, most of ATLC’s financing is locked in at older, higher levels and won’t reset until 2026. Marketing and servicing costs more than doubled due to integration and customer-acquisition spending tied to Mercury. Net margin improved year-over-year but still undershot expectations given the near-doubling of receivables.
Strategically, ATLC is still executing a long-term transformation from a niche subprime lender into a scaled credit-as-a-service platform with multi-segment exposure and deeper AI-driven underwriting. That shift enhances data quality and potential partner reach but compresses margins during the transition. Integration costs, marketing intensity, and funding lag will likely persist through early 2026 before efficiency gains and lower funding costs start to rebuild profitability.
Operationally, portfolio quality and company fundamentals remain solid. Delinquencies and loss trends are within model ranges, and early results from the acquired Mercury accounts are tracking as expected. The expansion into near-prime credit broadens Atlanticus’s addressable market and should produce steadier long-term returns once integration costs normalize and older high-rate funding rolls off.
Despite legacy cost drag, credit mark-to-market pressure, and yield compression, we view these as temporary headwinds. Meanwhile, macro tailwinds from interest rate declines and improving credit availability add to other supporting factors, prompting us to watch closely rather than sell outright. The scale and portfolio expansion following the Mercury acquisition give ATLC greater leverage for cost reductions and diversification across origination channels. Moreover, even excluding Mercury, receivables grew nearly 30% YoY in the 12 months ended September 30, 2025 – suggesting that underlying demand and origination capacity remain robust.
We expect continued strong top-line growth thanks to scale and acquisition contributions, but margin improvement will likely be modest in the current quarter, as legacy cost burdens will still weigh down results. Next year, as higher-cost funding rolls off, originations mature, and mix shifts favor higher-yield segments, profitability improvements should gradually follow. However, given reduced near-term visibility, we are keeping the stock under review – maintaining exposure while awaiting tangible evidence to confirm our thesis.
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This Week’s Top Growth Pick: OppFi (OPFI)
OppFi, Inc. is a technology-driven financial services platform focused on expanding access to responsible credit for everyday consumers. Built around a streamlined digital experience, it partners with banks to deliver small-dollar installment loans and other credit products designed for speed, transparency, and predictability. The platform uses alternative data and automation to assess creditworthiness beyond traditional scores – aiming to serve those who are often overlooked by conventional lenders. Positioned at the intersection of fintech and regulated banking, OPFI blends underwriting discipline with a mobile-first user journey, helping consumers manage short-term cash needs without navigating the friction of legacy lending. As inflation, volatility, and shifting employment trends reshape household finances, OppFi operates as a modern conduit between underbanked borrowers and accessible, tech-enabled credit.
Source: OppFi Q3 2025 Earnings Presentation
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Loan and Behold
Founded in Chicago in 2012, OppFi began as an online lender delivering short-term installment loans through its OppLoans brand to consumers underserved by traditional credit markets, such as non-prime borrowers. Over the next several years, the company sharpened its fintech stack – integrating alternative-data underwriting and rapidly scaling its loan operations – and transformed from a high-rate lender into a tech-enabled finance platform that increasingly relied on automation to reduce friction and expand credit access. The rebrand to “OppFi” reflected this broadened ambition.
During the last five years, the pace of change accelerated. In 2021, the company went public via a SPAC merger, gaining additional capital and visibility that allowed it to scale its bank-partnership origination model across the U.S. That period also saw OppFi shift from direct lending to operating as a platform partner for community banks – designing digital onboarding, underwriting, and servicing systems that these institutions use to reach non-prime borrowers. OppFi’s platform has become the backbone for several community-bank lending programs, with institutions like FinWise Bank, First Electronic Bank, and CCBank integrating its technology into their own credit offerings. This shift strengthened OppFi’s regulatory positioning and created a more scalable, lower-capital-intensity growth model.
On the tech side, OppFi rolled out its proprietary AI-driven underwriting engine Model 6, which allows the platform to increase automated approvals and tighten credit risk while serving tougher credit segments. That underwriting upgrade has become a central competitive lever. More recently, the company introduced same-day funding capability on the OppLoans product, further enhancing its consumer value proposition and operational efficiency. Same-day funding is a meaningful upgrade because speed is often the deciding factor for non-prime borrowers, and reducing the time between approval and disbursement increases both customer conversion and repayment performance. It also strengthens OppFi’s differentiation against traditional lenders that still operate with slower disbursement cycles.
In parallel, OppFi strengthened its capital and financing infrastructure to support growth in receivables and product expansion. In October 2025, the firm closed a new $150 million revolving credit facility, provided by funds managed by Castlelake L.P., at significantly improved terms.
While the product set remains centered on personal lending, the underlying shift is clear: OppFi has transformed from a niche subprime installment lender into a fintech-platform partner for banks, leveraging automation, data science, and alternative channels to capture more underserved credit demand. Recognition followed: in 2025, the company was named Best Personal Finance Company in the FinTech Breakthrough Awards. This accolade underscored how far the platform model had evolved from its origins as a single-product lender.
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Model Behavior
OppFi operates at the intersection of financial access, automation, and bank-partner infrastructure – a digital lending platform built to serve the millions of non-prime consumers who sit outside traditional credit channels. The model is straightforward: OppFi designs, builds, and operates the technology stack that community banks and finance partners use to originate, underwrite, and service small-dollar installment loans. These partners extend the credit; OppFi provides the engine behind it – from onboarding flows and AI-driven underwriting to servicing, verification, collections, and customer support. In return, the company earns platform fees that scale with originations and loan performance.
The OppLoans product remains the core revenue driver and represents the vast majority of the company’s revenue mix. While not subscription software in form, OppFi’s economics resemble a recurring model in practice. The platform generates repeatable, high-visibility fee income tied to ongoing servicing, consumer repayment cycles, renewals, and repeat borrowing behavior. Auto-approval rates approaching 80% and the steady use of bank-account data and repayment attributes create a high-throughput funnel with stable unit economics, giving the business a SaaS-like consistency even though revenues track credit activity.
The competitive edge centers on underwriting. OppFi’s Model 6 – soon to be Model 6.1 – blends alternative-data signals, behavioral attributes, and machine-learning segmentation to price risk with far greater granularity than traditional scorecard methods. Partners lean on this precision to target underserved but creditworthy borrowers, and this has become a genuine differentiator as neo-banks and digital lenders push into the same demographic. Onboarding speed also matters in this market: OppFi’s automation stack enables instant approvals, streamlined verification, and same-day funding, all of which boost conversion and customer satisfaction.
LOLA, the new origination system rolling out in early 2026, represents the next step in that evolution. Built as an AI-native platform with clean architecture and low technical debt, it is designed to speed the underwriting funnel, improve cross-system integration, and enable the rapid adoption of new models, servicing logic, and pricing frameworks. Management expects LOLA to lift automated approvals, shrink cycle times, and increase partner throughput – an essential lever for scaling without meaningful increases in headcount or fixed cost.
OppFi operates in a large addressable market. The company cites 48 million everyday Americans who lack access to traditional credit options, forming a demand pool worth tens of billions annually. Traditional banks underwrite only a fraction of this segment, leaving a wide gap that digital platforms can fill with targeted risk-pricing and automation. OppFi holds only a modest share today, but its bank-partner model, data advantage, and improving credit stack give it a clear path to steady penetration gains as demand for non-prime credit – and pressure on banks to modernize – continues to grow.
Source: OppFi Q3 2025 Earnings Presentation
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The Credit Circuit
OppFi’s financial momentum has settled into a consistent, almost rhythmic cadence – the kind of pattern investors look for when a volatile fintech begins behaving like a disciplined compounder. Q3 2025 underscored that shift. The company delivered record revenue of $155.1 million, up 13.5% year-over-year and ahead of internal targets, marking its seventh straight revenue beat and eleventh consecutive adjusted-EPS beat. The quality of that growth was just as important. Net originations rose 12.5% year-over-year, nearly half from new customers, and unit economics held firm even as newer vintages showed slightly higher early-stage losses.
Profitability followed the same pattern of controlled acceleration. GAAP net income rose sharply year-over-year, helped by non-recurring items that temporarily inflated its headline growth rate. Adjusted net income offered a cleaner view of underlying performance, reaching $40.7 million, up 41.4% year-over-year. Adjusted EPS of $0.46 exceeded expectations and reflected improving operating leverage as automation and AI-driven underwriting compressed manual servicing costs. Total expenses before interest declined to 30% of revenue from 33% a year earlier, signaling durable cost discipline rather than a one-off efficiency pop.
Margins held up even with a modest shift in credit metrics. Net charge-offs as a percentage of revenue ticked up to 35.1% from 34% last year – a manageable uptick tied to early-summer vintages – but pricing adjustments and Model 6 segmentation kept gross yield stable near 133%. Importantly, management noted no material deterioration in customer bank account data, suggesting the softening remained contained rather than systemic.
OppFi’s liquidity position strengthened as well. The company renewed its legacy Castlelake financing agreement on better terms, then secured a new $150 million credit facility at meaningfully lower rates. Interest expense fell to roughly 6% of revenue, down from about 8% last year, and management expects further relief as older tranches roll off. Cash generation improved alongside profitability; operating cash flow increased from the prior year, free cash flow remained comfortably positive, and balance-sheet flexibility expanded with the added capacity.
Guidance moved higher for the third time this year. Full-year 2025 revenue is now projected at $590-605 million, implying roughly 13-16% year-over-year growth. Adjusted net income is expected to reach $137-142 million, up from the prior $125-130 million range, while adjusted EPS is estimated at $1.54-1.60 – all above both earlier company forecasts and prevailing analyst assumptions at the time of the report. Management also reaffirmed expectations for continued double-digit growth in revenue and adjusted net income into 2026, supported by the rollout of Model 6.1 and the migration to the LOLA origination system that should further compress costs and lift throughput.
For a business long associated with volatility, these results tell a different story: steadily improving credit performance, tighter execution, and a rising earnings base reinforced by technology-led scalability.
Source: OppFi Q3 2025 Earnings Presentation
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Credit Worthy
OppFi sits within a tight cluster of U.S.-listed fintech lenders that blend technology-driven underwriting with exposure to non-prime consumer credit. Its most comparable peers include Enova International and Atlanticus Holdings – both Growth Portfolio fintech holdings. Oportun Financial offers another close parallel at a smaller market-cap range, combining AI-powered underwriting with mission-driven lending to near-prime and non-prime consumers. Upstart, a larger peer, provides a useful technology benchmark thanks to its AI-centric credit models and bank-origination infrastructure, even if its borrower mix skews more prime. Among these, Enova stands out as the aspirational peer due to its accelerating scale, profitability, and platform breadth.
The fintech scene has recovered from early 2025 doldrums, but not every stock has shared in the rebound. Jittery growth investors have rewarded companies that exceed estimates while hitting operational measures, while every mistake has been severely punished. That’s why Enova’s stock surged this year, while Upstart’s dropped. Meanwhile, OppFi’s performance year-to-date has been remarkably strong, and its 26% gain is second only to Enova. Despite this strong run, analysts see a potential upside of over 55% for the next 12 months, supported by the stock’s apparent undervaluation compared to its growth momentum.
OppFi’s trailing and forward non-GAAP P/E ratios, along with its forward GAAP P/E, are the second lowest among peers, despite its strong past and expected earnings growth. These multiples – as well as the trailing and forward Price/Sales and trailing Price/Cashflow metrics – also sit well below the sector median, despite the difficult comps to the traditionally lower-priced Financial sector. The most striking metric is its valuation on free cash flow: OppFi trades at 0.72x trailing FCF, despite having achieved GAAP profitability and registering double-digit growth and 48%+ ROE. That’s an extremely rare combination – not just among fintechs, but across the small-cap equity universe. Based on this metric, it’s dramatically cheaper than sector averages and every peer except one: Oportun, which trades at a similar multiple but carries far greater credit risk, sustained net losses, and weaker returns. Another metric clearly pointing at a deeply undervalued growth setup is its forward PEG of 0.15 – extremely low even for a small-cap fintech, signaling a valuation far below what its growth fundamentals imply.
On top of its strong upside potential, OppFi’s robust free cash flow generation allows it to reward its shareholders through special (one-time) dividends – paid in Q2 2025 as a one-time LLC distribution – and buybacks. In August, the board approved an additional $20 million for share repurchases, doubling the program to $40 million. The company repurchased ~$7.6 million worth of stock in Q3, with significant free capacity remaining, supporting the outlook for continued buybacks, at least until the stock reprices much higher.
With valuation multiples still sitting far below peers and fundamentals pushing in the opposite direction, OppFi is positioned to keep closing the gap as credit performance normalizes and Model 6.1 scales. If execution holds, the next leg of the rerating should come not from hope but from delivery – a dynamic that has already begun to reshape sentiment around the stock.
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To Sum It All Up
OppFi is shaping into a durable growth engine in a segment long written off as too volatile to reward disciplined execution. Its advantage is structural – a refined credit model that keeps improving with every data cycle, an origination platform built to scale without adding cost, and a product suite designed for consumers that mainstream financial institutions underserve. Growth is no longer simply a function of loan volume, but of smarter segmentation, stronger retention, and a rising mix of repeatable, technology-driven economics. As automation deepens and new underwriting models take hold, OppFi is positioned to convert efficiency gains into expanding margins and steadier compounding. The market continues to view it as a high-risk lender. The business it is becoming tells a very different story.
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Smart Growth Portfolio
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Disclaimer
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