LendingTree (NASDAQ:TREE) Announces Earnings Results

LendingTree (NASDAQ:TREE) posted its earnings results on Wednesday. The financial services provider reported $0.68 EPS for the quarter, missing the consensus estimate of $1.41 by ($0.73), FiscalAI reports. LendingTree had a net margin of 15.02% and a return on equity of 17.01%. The firm had revenue of $305.77 million during the quarter, compared to the consensus estimate of $315.56 million. During the same quarter in the prior year, the business posted $1.13 earnings per share. LendingTree’s revenue for the quarter was up 25.3% compared to the same quarter last year.

Here are the key takeaways from LendingTree’s conference call:

• Insurance led growth, with revenue up 25% year over year and adjusted EBITDA up 11%; management expects healthy growth to continue in the second half despite variable margins remaining near Q2 levels.
• Small-business lending materially underperformed expectations as merchant demand, loan sizes, and close rates weakened amid cautious sentiment; management now expects the business to be flat to down for the year rather than the previously anticipated growth.
• Management believes SMB weakness is temporary and macro-driven rather than structural, citing recovering lender appetite, improving close rates, larger loan requests, and July performance that is expected to be the strongest since Q1.
• Operating leverage and balance-sheet flexibility improved, with operating expenses essentially flat year over year, approximately $80 million of annual free cash flow after interest, and net leverage falling to 1.9x from 3.0x a year ago.
• LendingTree is accelerating AI initiatives across internal operations and consumer products, including AI offer summaries, voice and text engagement, and a home-loan rate confidence app; its homepage redesign has increased sessions by 11% and form starts by 18%.

LendingTree Trading Down 3.8%

NASDAQ TREE traded down $1.54 during trading hours on Wednesday, hitting $39.46. 285,169 shares of the company’s stock were exchanged, compared to its average volume of 318,335. The stock has a 50-day simple moving average of $40.30 and a 200 day simple moving average of $43.81. LendingTree has a 1-year low of $32.65 and a 1-year high of $77.35. The firm has a market cap of $550.59 million, a price-to-earnings ratio of 3.07 and a beta of 2.00. The company has a current ratio of 1.89, a quick ratio of 1.89 and a debt-to-equity ratio of 1.27.

Hedge Funds Weigh In On LendingTree

Several institutional investors have recently added to or reduced their stakes in the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in shares of LendingTree by 5.5% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 23,598 shares of the financial services provider’s stock worth $1,188,000 after buying an additional 1,222 shares during the period. Cetera Investment Advisers increased its stake in shares of LendingTree by 43.6% in the 2nd quarter. Cetera Investment Advisers now owns 16,039 shares of the financial services provider’s stock valued at $595,000 after acquiring an additional 4,871 shares in the last quarter. Legal & General Group Plc lifted its position in shares of LendingTree by 12.7% during the 2nd quarter. Legal & General Group Plc now owns 10,840 shares of the financial services provider’s stock valued at $402,000 after acquiring an additional 1,223 shares during the period. Rhumbline Advisers lifted its position in shares of LendingTree by 12.6% during the 2nd quarter. Rhumbline Advisers now owns 16,754 shares of the financial services provider’s stock valued at $621,000 after acquiring an additional 1,875 shares during the period. Finally, American Century Companies Inc. boosted its stake in LendingTree by 9.3% during the second quarter. American Century Companies Inc. now owns 26,010 shares of the financial services provider’s stock worth $964,000 after acquiring an additional 2,217 shares in the last quarter. 68.26% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several research analysts have recently issued reports on the company. Zacks Research downgraded LendingTree from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, June 30th. JPMorgan Chase & Co. initiated coverage on shares of LendingTree in a research report on Tuesday, April 14th. They set an “overweight” rating and a $50.00 target price on the stock. Weiss Ratings reissued a “hold (c)” rating on shares of LendingTree in a report on Wednesday, June 24th. Needham & Company LLC restated a “buy” rating and issued a $60.00 price target on shares of LendingTree in a research report on Friday, May 1st. Finally, Wall Street Zen downgraded shares of LendingTree from a “strong-buy” rating to a “buy” rating in a research note on Monday, July 20th. Five investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $66.20.

LendingTree Company Profile

LendingTree, Inc operates an online marketplace that connects consumers with a network of lenders and financial service providers. Through its platform, borrowers can compare loan offers for mortgages, home equity loans, personal loans, student loans, auto loans and small business financing. The company also offers tools for comparing credit cards and deposit accounts, allowing users to research rates and terms from a range of providers in one place.

Founded in 1996 by Doug Lebda, LendingTree pioneered the comparison-shopping model for consumer credit products.