Happen Raises 2026 EPS Forecast to $1.87–$1.92
Key Facts
Happen raised its 2026 diluted EPS forecast to a range of $1.87–$1.92, from $1.80–$1.90, saying the new guidance reflects expected annual growth of between 61% and 66%. The company reported results on October 28, after a third quarter in which EPS beat analysts’ estimates while revenue came in below expectations. For the fourth quarter, it also expects loan originations of $3.1–$3.2 billion and diluted EPS of $0.43–$0.48. The guidance links a higher earnings target with continued lending growth in a high interest rate environment. The company’s shares closed at $14.34 on October 28, according to EL7 data.
Third-quarter EPS was $0.50, topping the average analyst estimate of $0.45, according to Investing.com. Revenue, by contrast, was $263.16 million, below the consensus estimate of $273.48 million. The company’s release reported net revenue of $263.2 million, compared with $266.2 million in the third quarter of the previous year. The company said the comparison was affected by its election of fair value accounting for all new loan originations in 2026. This means the revenue comparison was made amid an accounting change cited in the release, while the result also differed from market estimates.
The company attributed the improvement in credit losses to strong credit performance and the application of the fair value option to new originations. It recorded a $15.9 million benefit for provision for credit losses in the third quarter, compared with an expense of $46.3 million a year earlier. The shift from a benefit to an expense represents a difference in an item that affected the year-over-year comparison for the period. The company cited this improvement in its explanation of the quarterly results, alongside the accounting change affecting new loan originations. The earnings release did not provide further details in these figures on credit quality or the contribution of each factor to profitability.
In its fourth-quarter guidance, the company said it expects loan originations of between $3.1 billion and $3.2 billion and diluted EPS of between $0.43 and $0.48. The forecast assumes a stable consumer and interest rate environment, with a 25-basis-point increase in the federal funds rate in December. For the full year, Happen narrowed its loan origination guidance range and said it is prioritizing unit economics in a high interest rate environment. The company is targeting annual growth in loan originations of between 26% and 27%. This approach puts the margin on each loan at the center of the expansion decisions accompanying the higher EPS forecast.
Chief Executive Scott Sanborn said the company had begun expanding into the home improvement market, which he estimated at $500 billion. He said the initiative is part of the growth plans the company is pursuing. The move into this market comes as the company has set a range for loan origination growth while prioritizing unit economics. The company is seeking to add a new area to its financing activities, according to Sanborn’s statement in the earnings release. The release did not specify a timeline or target for the company’s market share in the quoted remarks.