OppFi is a financial technology company that most investors are not even aware of, but has significant growth potential. It reaches approximately 60 million people in the US with low credit scores, no banking history, or insufficient credit history, and provides them with access to the financial system. While it is almost impossible for these people to get a loan from traditional banks, OppFi offers them small but fast and accessible loans.
The loans offered by OppFi are generally around $1,750 on average and are paid back in short terms, such as 11 months. The interest rates are quite high - 163% on average - but it is still a more affordable option than other borrowing alternatives for this target audience. This system helps them meet their financial needs while also providing high profitability for OppFi.
To overcome legal restrictions, OppFi partners with community banks in states that do not have high interest rates, such as Utah. This allows it to offer high-interest loans in other states based on federal law. The credit process is managed by OppFi, technically the credit is provided through Utah banks, and then these credits are sold to companies (SPVs) controlled by OppFi. This allows the company to implement this model throughout the United States without having a Utah license.
The SPVs that the company uses to reduce credit risk hold the credits on their own balance sheets and handle the collection process. OppFi currently has three such SPVs, with a total credit capacity of $525 million, of which only $288 million has been used. This structure both spreads the risk and makes it easier for the company to manage its relationships with credit providers.
When it comes to financial performance, the picture is quite impressive. The company has increased its net income (after write-offs) by an average of 26% annually over the last four years. It made a net profit of $83 million in 2024. Since the first quarter of 2025 was better than expected, management increased its annual net profit expectation to $106-109 million. This means annual growth of at least 27%.
In the long term, there are even bigger opportunities ahead. If the company can increase its lending capacity to $1 billion by 2030 and reduce its loss ratio to 34% and expense ratio to 30%, it could generate net profits of approximately $396 million. In this scenario, even a conservative P/E ratio of 13 would value the company at $5.1 billion. That’s five times its current value.
In conclusion, $OPFI offers a high-growth potential investment opportunity that deserves to be analyzed in depth, both in terms of its business model and financial projections.
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