LendingTree (NASDAQ:TREE) Releases Earnings Results, Misses Expectations By $0.73 EPS

LendingTree (NASDAQ:TREE) released its earnings results on Wednesday. The financial services provider reported $0.68 earnings per share for the quarter, missing analysts’ consensus estimates of $1.41 by ($0.73), FiscalAI reports. The company had revenue of $305.77 million for the quarter, compared to the consensus estimate of $315.56 million. LendingTree had a net margin of 15.02% and a return on equity of 17.01%.

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 on Wednesday, reaching $39.46. The company had a trading volume of 285,169 shares, compared to its average volume of 318,335. The firm has a market cap of $550.59 million, a price-to-earnings ratio of 3.07 and a beta of 2.00. LendingTree has a fifty-two week low of $32.65 and a fifty-two week high of $77.35. The business has a 50 day moving average of $40.30 and a two-hundred day moving average of $43.81. The company has a debt-to-equity ratio of 1.27, a current ratio of 1.89 and a quick ratio of 1.89.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Ameriprise Financial Inc. grew its position in shares of LendingTree by 1,747.8% in the 2nd quarter. Ameriprise Financial Inc. now owns 546,536 shares of the financial services provider’s stock valued at $20,260,000 after buying an additional 516,958 shares during the last quarter. Arrowstreet Capital Limited Partnership raised its position in shares of LendingTree by 1,163.1% during the third quarter. Arrowstreet Capital Limited Partnership now owns 263,835 shares of the financial services provider’s stock worth $17,078,000 after acquiring an additional 242,947 shares during the last quarter. Dimensional Fund Advisors LP raised its position in shares of LendingTree by 1.3% during the fourth quarter. Dimensional Fund Advisors LP now owns 254,557 shares of the financial services provider’s stock worth $13,515,000 after acquiring an additional 3,297 shares during the last quarter. State Street Corp raised its position in shares of LendingTree by 4.4% during the fourth quarter. State Street Corp now owns 244,954 shares of the financial services provider’s stock worth $13,005,000 after acquiring an additional 10,304 shares during the last quarter. Finally, Federated Hermes Inc. lifted its stake in shares of LendingTree by 17.0% in the fourth quarter. Federated Hermes Inc. now owns 169,982 shares of the financial services provider’s stock worth $9,024,000 after acquiring an additional 24,737 shares during the period. 68.26% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

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

About LendingTree

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.