Shares of online lenders have been pounded after business lender On Deck Capital reported disappointing earnings and analysts backed away from the stock, citing growth concerns.
On Deck Capital shares lost more than 33 percent in trading Tuesday, and Lending Club, which focuses more on consumer loans, saw shares drop by 10 percent. Wednesday, both stocks fell again, with Lending Club losing more than 3 percent at the open and On Deck stock falling 9 percent. On Wednesday morning, On Deck Capital was down 7.34 percent at $5.10 a share; Lending Club was down 2.46 percent at $6.94.
Lending Club earnings are expected Monday.
FBR Capital Markets analysts downgraded its call on On Deck Capital to "market perform," saying the company faces a "longer runway to sustainable profitability."
FBR analyst Bob Ramsey blamed the weaker outlook on reduced volume of loans sold and slower origination stemming from diminishing marketplace demand and tougher underwriting standards.