Stonegate Capital Partners has updated its coverage on OppFi, Inc. (NYSE: OPFI) following the company's third quarter 2025 earnings release. OppFi reported revenue of $155.1 million, adjusted net income of $40.7 million, and adjusted EPS of $0.46, surpassing consensus estimates of $153.4 million, $28.9 million, and $0.32, respectively. Net revenue margin expanded 70 basis points year-over-year to 67.4%, driven by record total revenue growth of 13.5% and disciplined operating leverage.
Net income surged 136.9% year-over-year to $75.9 million, boosted by a $32.0 million non-cash gain from lower warrant fair value. Adjusted net income increased 41.0% to a new quarterly record of $40.7 million, with adjusted net income margin expanding 520 bps to 26.3%. Adjusted EPS rose to $0.46 from $0.33 in the prior-year period, reflecting scale benefits and cost discipline.
OppFi ended the quarter with $75.2 million in cash and restricted cash, including $45.4 million in unrestricted cash. Total funding capacity stands at $600.2 million, with $204.2 million in undrawn debt. Year-to-date free cash flow reached $66.1 million, enabling a $21.7 million special dividend and $7.4 million in share repurchases during 3Q25. The company also secured a new $150 million facility with Castlelake that reduces financing costs by 150 basis points.
Total net originations increased 12.5% year-over-year to $246.1 million, driven by stronger demand and credit-model upgrades allowing larger average loans. Retained net originations grew 8% to $215.2 million, while receivables ended the quarter at $481.0 million, up 16% from a year ago. The auto-approval rate improved to 79% from 77%, reflecting advancements in OppFi's Model 6 platform.
Credit quality remained stable, with the net charge-off rate at 35.1% of total revenue, up approximately 100 bps from last year but down from 42% in 4Q24. Annualized net charge-offs as a percentage of average receivables increased to 47% from 46%, driven by elevated early-summer charge-offs offset by improved recoveries. The company continues to refine risk-based pricing and is rolling out Model 6.1 in the fourth quarter to tighten higher-risk segments.
Based on continued momentum, OppFi raised the low end of its FY25 revenue guidance to $590–$605 million from $578–$605 million. Adjusted net income guidance increased to $137–$142 million from $125–$130 million, and adjusted EPS guidance rose to $1.54–$1.60 from $1.39–$1.44, based on approximately 89.0 million diluted shares. Stonegate believes OppFi is well positioned to meet or exceed its guidance.
For valuation, Stonegate uses a P/E comp analysis with a multiple range of 8.5x to 9.5x, yielding a valuation range of $14.56 to $16.28 with a midpoint of $15.42.
