Is OPFI's Underwriting Engine the Key Profitability Catalyst?

OppFi’s OPFI proprietary AI and machine learning-based automated underwriting engine Model 6 has been the primary engine behind its record financials over the quarters. In the third quarter of 2025, the company registered a 136.9% year-over-year upsurge in its net income, whereas the top line grew 13.5%. This disproportional growth in revenues and profitability hints at operational efficiency.

During the aforementioned quarter, OPFI’s auto-approval rate was at 79.1%, up 3% year over year. The CEO remarked that this rising auto approval rate fueled OppFi’s operational efficiency. It facilitated improving credit quality assessment without human intervention, thus ensuring a meagre 0.1% year over year rise in total expenses. As a result, its adjusted net income surged 82.7%, with adjusted EPS soaring 78.9%.

Recently, the company has made improvements in its legacy credit assessment engine, Model 6, and introduced an iteration, Model 6.1 refit. This pivot was effective, as evidenced by an 11.2% year-over-year dip in net charge-offs as a percentage of total revenues and a 9.5% fall in net charge-offs as a percentage of average receivables for the nine months ended Sept. 30, 2025.

Banking on Model 6.1 refit’s prowess, management decided to raise its full-year adjusted net income guidance to $137-$142 million from the preceding quarter’s $125-$130 million. Similarly, the adjusted EPS outlook was hiked to $1.54-$1.60 from the preceding quarter’s view of $1.39-$1.44. For investors, it is certainly a green flag, making OppFi’s underwriting engine central to its profitability position.

OPFI’s Price Performance, Valuation & Estimates

The OppFi stock gained 24.1% in a year against the 6.2% dip in its industry and the Zacks S&P 500 Composite’s 20.3% rise. The stock has outperformed Evertec’s EVTC 10.7% dip and Fidelity National Information Services’ FIS 13.6% drop during the same timeframe.

1-Year Share Price Performance

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From a valuation perspective, OPFI trades at a forward 12-month price-to-earnings ratio of 5.98X, lower than Evertec’s and Fidelity National Information Services’ 8X and 10.58X, respectively.

P/E - F12M

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OppFi and Evertec have a Value Score of A, whereas Fidelity National Information Services carries a Value Score of B.

The Zacks Consensus Estimate for OppFi’s earnings per share for 2025 and 2026 has been unchanged at $1.57 and $1.71, respectively, over the past 60 days.

Image Source: Zacks Investment Research

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

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

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