Enova CEO Says Dropped Bank Bid Hasn't Diminished Growth, Eyes Buybacks At 'These Valuation Levels'
October buybacks have already matched the third quarter's $46 million pace, and $252 million of covenant-limited capacity remains.
Enova's chief executive said the company's decision to withdraw its bank applications has not hurt its ability to grow, and that the stock is worth more than it trades for. CFO Scott Cornelis added on the earnings call that October buybacks have already matched the whole third quarter, when Enova repurchased 243,000 shares for $46 million.
Buybacks Lead The Message
CEO Steve Cunningham said on the call Thursday that Enova's ability to deliver growth and profitability "has not been diminished at all" by last month's decision to withdraw its regulatory applications to become a bank. He said the planning of the past year produced new product, operational and risk-management insights.
"We believe there is meaningful upside to our current share price," Cunningham said, adding that Enova will "opportunistically lean into share re-purchases to support our valuation."
Cornelis said the third-quarter pace more than doubled the second quarter's, leaving $252 million of repurchase capacity under the senior note covenants entering the fourth quarter. "So far in October, we have already matched our buyback activity for the entire third quarter," he said.
Capital Room Within Covenants
An analyst asked how management thinks about target returns if the senior note covenants were set aside. Cunningham said tangible capital is healthy, with "some room to tighten that down a bit," and that returns on equity are growing about as fast as or slightly faster than the business. Within the covenant limits, he said, Enova intends to be opportunistic "particularly at these valuation levels."
Enova, which runs online lending businesses offering installment loans and lines of credit to consumers and small businesses, had agreed in December 2025 to buy Grasshopper Bancorp for $369 million as a route to becoming a bank holding company. According to a law-firm release, Enova withdrew its applications after the close on September 14, and shares fell 23.4% to $173.61 the next day, prompting investor-law-firm investigations. The stock closed Thursday at $176.78, for a market value of $4.5 billion.
A Quarter Above $1 Billion
Adjusted earnings per share rose 33% to $4.48. Revenue climbed 26% and topped $1 billion in a quarter for the first time, and originations rose 31% to $2.6 billion. The net charge-off ratio improved to 8.1% from 8.5% a year earlier.
Enova ended the quarter with $1.3 billion of liquidity: $508 million of cash and marketable securities plus $817 million of available debt capacity. For the fourth quarter, it expects revenue about 25% higher than a year earlier and adjusted EPS 30% to 35% higher.
Cunningham said Enova will explore a deposit advance product, secured consumer lending and small business embedded finance, but does not plan to update investors on them every quarter.
Cornelis said the company expects to keep leaning into repurchases, with $252 million of covenant capacity left to use.
Sources
- Enova Non-GAAP EPS of $4.48 beats by $0.08, revenue of $1.01B beats by $10M (NYSE:ENVA) | Seeking Alpha — seekingalpha.com
- Enova International: Q3 Earnings Snapshot | wusa9.com — Associated Press
- Enova Reports Third Quarter 2026 Results — prnewswire.com
- Wolf Popper LLP Announces Investigation on Behalf of Enova — globenewswire.com
- INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On — globenewswire.com
