LendingClub (LC) shares plunged 7.81% in pre-market trading on Wednesday following the release of its first-quarter 2025 financial results, which fell short of analyst expectations despite beating revenue estimates. The online lending platform's disappointing earnings report, coupled with concerns over rising credit loss provisions, has triggered a significant sell-off.

For Q1 2025, LendingClub reported earnings per share (EPS) of $0.10, missing the consensus estimate of $0.11 and declining from $0.11 in the same quarter last year. However, the company's revenue came in at $217.71 million, surpassing analyst projections of $214.51 million and marking a 20.5% increase year-over-year. Despite the revenue beat, investors seemed more focused on the company's profitability and risk management.

A major concern for investors was the sharp rise in LendingClub's provision for credit losses, which jumped to $58.1 million from $31.9 million in the year-ago quarter. This significant increase suggests the company is preparing for potential loan defaults in a challenging economic environment. Additionally, net income for the quarter declined to $11.67 million from $12.25 million year-over-year, further dampening investor sentiment. Adding to the negative outlook, Keefe Bruyette lowered its price target on LendingClub to $14 from $15, although it maintained an Outperform rating on the shares. The combination of these factors has likely contributed to the steep pre-market decline, as investors reassess the company's growth prospects and risk profile in the current economic landscape.