What Happened?
Shares of financial technology company Enova International (NYSE:ENVA) fell 25.4% in the morning session after investors continued to sell off the stock due to the company's sudden withdrawal of its bank regulatory applications, despite reaffirming its financial outlook. According to a company press release, Enova withdrew its pending applications with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System to acquire digital bank Grasshopper Bancorp. Enova CEO Steve Cunningham said in a statement that federal regulators lack clear standards for nonbanks that want to become banks, leaving the acquisition process susceptible to political pressure and outside advocacy. Alongside the withdrawal, Enova reiterated its guidance for both the third quarter and the full year 2026, according to the release. The company expects third-quarter revenue growth of around 25% and adjusted earnings per share (EPS) growth of roughly 30% year-over-year. For the full year, Enova projected revenue growth between 20% and 25%, alongside adjusted EPS growth between 30% and 35% compared to the previous year. Despite the solid growth expectations and management’s intent to accelerate share repurchases, the regulatory setback weighed heavily on investor sentiment, sending shares down 25.43%, according to stock market quote data.
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What Is The Market Telling Us
Enova’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Enova and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 13.1% on the news that the company announced it agreed to acquire Grasshopper Bancorp, a digital bank, in a cash-and-stock transaction valued at approximately $369 million. The deal aimed to combine Enova's online lending operations with Grasshopper's digital banking infrastructure, creating a more diversified financial services company. Grasshopper Bank had over $1.4 billion in total assets as of September 2025. The acquisition was expected to significantly boost Enova's financial results, adding more than 15% to its adjusted earnings per share in the first year after the deal is finalized, and over 25% once the full benefits are realized. The transaction, which will be paid for with a mix of cash and new Enova shares, is expected to close in the second half of 2026, pending regulatory and shareholder approvals.
Enova is up 4.6% since the beginning of the year, but at $169.39 per share, it is still trading 36.2% below its 52-week high of $265.45 from August 2026. Investors who bought $1,000 worth of Enova’s shares 5 years ago would now be looking at an investment worth $5,227.
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