What happened

Shares of the digital subprime lender OppFi (NYSE: OPFI) traded nearly 11% higher as of 10:50 a.m. ET on Friday after the company reported earnings results for the fourth quarter of 2021. Meanwhile, other consumer finance stocks struggled today.

So what

OppFi reported adjusted earnings per share of $0.13 on total revenue of nearly $96 million for the fourth quarter, with both numbers missing analyst estimates.

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OppFi, which lends to subprime borrowers, generated net originations of nearly $187 million in the quarter, growing origination volume more than 13% from the sequential quarter. Ending receivables in the fourth quarter grew to $337.5 million. Net charge-offs as a percentage of total receivables, which looks at debt unlikely to be collected and is a good indicator of loan losses, surged to 53% in the fourth quarter, up from 36% in the third quarter.

For this year, management is guiding for revenue and ending receivables to grow 20% to 25% from 2021.

Now what

OppFi has been in disarray in recent months, having now announced two new CEOs in just three months. Charge-offs are now sky high, and we haven't even seen the impact of higher interest rates and potentially sustained high inflation on the company's customer base, which already defaults at a high rate.

Still, the stock has taken a big hit already, and now Todd Schwartz, the founder of the company, is back at the helm. OppFi has already launched a $20 million share repurchase program, and Schwartz said on the earnings call that the company is "prepared to further invest and support the stock when we see such a disconnect in the market." The company trades at four times forward earnings.

I wouldn't recommend buying this stock, but if you are already in like me, I don't see holding as a bad move, given the depressed valuation and potential for more share repurchases.

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Bram Berkowitz owns OppFi Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.