Investment Idea: OppFi Inc. (OPFI)

OppFi Inc. (OPFI): Investment Idea

Current Price: $10.5 Market Cap: $0.9B

1. Executive Summary:

OppFi Inc. (OPFI) presents an attractive investment opportunity given its established fintech platform enabling banks to offer lending products to underserved consumers. With a compelling valuation and potential for significant growth in its core installment loan and newer credit card products, OPFI offers exposure to the burgeoning fintech lending market.

2. Investment Thesis (Bull Case):

• Focus on Underserved Market: OPFI's core business, facilitating the OppLoan installment loan, directly addresses the large and growing market of credit-constrained consumers who are often underserved by traditional banks. This provides a structural tailwind for demand.
• Platform Business Model & Bank Partnerships: OPFI's technology platform model, enabling banks to originate loans, is highly scalable and capital-light compared to direct lending models. Strong relationships with banks are critical to long-term sustainability and growth.
• Growth in Newer Products: The expansion into payroll deduction secured installment loans (SalaryTap) and credit cards (OppFi Card) diversifies revenue streams and opens new avenues for growth. Success in these product lines could significantly increase OPFI's addressable market and profitability.
• Compelling Valuation: At a market cap of $0.9B and a price of $10.5, OPFI trades at an attractive valuation relative to its growth potential and peers in the fintech space. Future earnings growth should lead to stock outperformance.

3. Key Risks:

• Regulatory Scrutiny: The subprime lending market is subject to significant regulatory scrutiny, and changes in regulations could negatively impact OPFI's business model and profitability.