Oportun Harnesses Advanced Technology: Could This Be a Turning Point?

Oportun Financial OPRT has been leveraging technology to boost its underwriting standards and offer personalized customer service. The company uses artificial intelligence (AI), particularly machine learning (ML), to use alternative datasets to assess the credit profiles of its clients. This enables it to provide a score to roughly all its clients, including those who have little to no credit history.

Further, the company has been leveraging data from the recent inflationary period to enhance the V12 credit model to align with conservative credit standards through granular decision-making. OPRT acquired Hello Digit, Inc. in 2021, a neobanking platform offering automated savings, investing, and banking tools.

This enables enhanced underwriting, leading to lower default risks, and ensures consistent revenue growth while mitigating costs. As a result, OPRT’s annualized net charge-off (NCO) rate declined in 2024 to 12% from 12.2% in 2023. The NCO rate rose to 12.2% during the first quarter of 2025 due to lower average daily principal balance as the company sought to reduce back-book loan exposure.

Moreover, the lending database allows OPRT to scale up its operations efficiently with minimal infrastructure investment. Additionally, the company offers the Set & Save product, which helps its clients manage their money by analyzing their obligations and expense routines.

Thus, the assimilation of sophisticated technology to address its customers’ needs offers the company a competitive edge over its counterparts, which often rely on traditional datasets to provide credit scores. This enables it to grow its market share rapidly and achieve efficiency alongside solid underwriting.

Technological Strengths of Oportun’s Peers

Oportun’s peers like Enova International, Inc. ENVA and Regional Management Corp. RM have also been using robust technology to improve credit underwriting capabilities.

Enova uses The Colossus Analytics Engine, a proprietary technology, to offer analytics and customer service capabilities to quickly evaluate, underwrite, and fund loans or provide financing. Roughly 90% of the models are ML-based for Enova.

Similarly, Regional Management has been improving its technological infrastructure to reduce its delinquency rates and source low-risk originations. Regional Management had a 7.1% delinquency rate during the first quarter of 2025.

OPRT’s Price Performance, Valuation and Estimates

Shares of Oportun have surged 80.4% so far this year against the industry’s decline of 6.3%.

From a valuation standpoint, OPRT trades at a price-to-book ratio of 0.72, well below the industry average.

The Zacks Consensus Estimate for Oportun’s 2025 and 2026 earnings indicates year-over-year growth of 63.9% and 39.2%, respectively. Earnings estimates have been revised downward for both years over the past 30 days.

Oportun currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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