The firm also reduced its price target on the stock to $6 from $6.50 after transferring coverage to its analyst Jefferson Harralson.
The New York-based company offers an online platform for small business lending.
The lower rating and price target reflect the uncertainty in the gain-on-sale market and the company's lack of profitability, the Fly reports.
Shares of On Deck closed up by 3.82% to $5.17 on Tuesday.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ONDK