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Lendingtree Inc (TREE)
:TREE
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Lendingtree
(NASDAQ:TREE)
60Neutral
Positive Factors
EBITDA Margin
Improving EBITDA margin outlook and an inexpensive valuation support a positive investment thesis for TREE.
Financial Performance
TREE posted results that exceeded expectations with strong performance across all segments, signaling robust financial health.
Growth Outlook
TREE's guidance indicates double-digit growth in consumer, home, and insurance segments, driving positive market sentiment.
Negative Factors
Cost Considerations
Rising customer acquisition costs are a point of concern that may impact profitability.
Valuation Concerns
The price target for TREE is lowered to reflect concerns over lower valuations despite strong financial performance.
Lendingtree (TREE) vs. S&P 500 (SPY)
Market Cap
$744.42M
Dividend YieldN/A
Average Volume (3M)268.99K
Price to Earnings (P/E)―
Beta (1Y)3.00
Revenue Growth33.86%
EPS Growth66.85%
CountryUS
Employees927
SectorFinancial
Sector Strength84
IndustryFinancial - Conglomerates
Share Statistics
EPS (TTM)-3.14
Shares Outstanding13,393,620
10 Day Avg. Volume304,801
30 Day Avg. Volume268,991
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.77
Price to Cash Flow (P/CF)10.70
P/FCF Ratio12.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$66.83Price Target Upside29.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Lendingtree Business Overview & Revenue Model
Company DescriptionLendingTree, Inc., through its subsidiary, LT Intermediate Company, LLC, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, reverse mortgage, and home equity loans; lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as credit repair and debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home and automobile, through which consumers are matched with insurance lead aggregators to obtain insurance offers. LendingTree, Inc. also operates Student Loan Hero, a personal finance website dedicated to helping student loan borrowers manage their student debt; QuoteWizard.com, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is headquartered in Charlotte, North Carolina.
How the Company Makes MoneyLendingTree generates revenue primarily through fees paid by lenders and financial institutions for the consumer leads and data provided by the platform. The company earns a substantial portion of its income from lead generation services, where lenders pay for access to potential customers interested in their financial products. Additionally, LendingTree earns revenue from advertising and marketing services offered to financial service providers. Significant partnerships with banks, credit unions, and other financial institutions contribute to its earnings by expanding the range of products and services available to consumers on its platform. The company also benefits from its strong brand recognition and digital marketing expertise, which help attract and retain a large user base.
Lendingtree Financial Statement Overview
Summary
LendingTree faces profitability challenges with a negative net profit margin despite revenue recovery. High debt levels and inconsistent EBIT/EBITDA margins add financial risk, though cash flow management shows improvement.Income Statement
Lendingtree has faced declining revenue trends, with a notable decrease from 2021 to 2023. Despite a positive turnaround in 2024 with a revenue increase, the net profit margin remains negative due to ongoing losses, indicating profitability challenges. Gross profit margins are relatively high, suggesting potential for profitability if operational efficiencies improve. However, historical EBIT and EBITDA margins have been inconsistent, reflecting volatility in core operations.45
Neutral
Balance Sheet
The balance sheet shows a high level of debt relative to equity, with a debt-to-equity ratio that has increased over recent years, reaching 3.8 in 2024. This high leverage poses financial risks. Return on equity is negative due to net losses, and the equity ratio has declined, indicating reduced financial stability. The company has consistently reduced its stockholders’ equity, which could be concerning for investors.40
Negative
Cash Flow
Operating cash flow remains positive, but the trend shows decreasing free cash flow growth, with a significant drop in 2024. The free cash flow to net income ratio is positive due to better cash management, despite net losses. There is a strong operating cash flow to net income ratio, suggesting good cash generation capability relative to reported losses. However, consistent negative net income affects overall cash flow strength.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 900.22M | 672.50M | 984.99M | 1.10B | 909.99M | Gross Profit |
| 864.15M | 633.74M | 927.22M | 1.04B | 855.50M | EBIT |
| 44.63M | -40.61M | -24.50M | 123.50M | -1.55M | EBITDA |
| 73.12M | 21.86M | 17.05M | 60.88M | 53.25M | Net Income Common Stockholders |
| -33.06M | -122.40M | -187.95M | 69.11M | -22.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 106.59M | 112.05M | 298.85M | 251.23M | 169.93M | Total Assets |
| 767.67M | 802.76M | 1.20B | 1.30B | 1.19B | Total Debt |
| 413.36M | 611.15M | 912.76M | 740.32M | 703.77M | Net Debt |
| 306.77M | 499.10M | 613.92M | 489.09M | 533.84M | Total Liabilities |
| 658.85M | 678.63M | 991.37M | 851.36M | 824.23M | Stockholders Equity |
| 108.82M | 124.13M | 207.94M | 447.99M | 364.76M |
| Cash Flow | Free Cash Flow | |||
| 51.04M | 55.04M | 31.52M | 99.51M | -3.58M | Operating Cash Flow |
| 62.26M | 67.57M | 42.97M | 134.57M | 38.57M | Investing Cash Flow |
| -11.22M | -12.48M | -27.88M | 10.07M | -122.15M | Financing Cash Flow |
| -56.50M | -242.01M | 32.67M | -56.96M | 193.29M |
Lendingtree Technical Analysis
Positive
51.68
Price Trends
44.61
Positive
43.94
Positive
47.54
Positive
Market Momentum
2.81
Negative
65.83
Neutral
93.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TREE, the sentiment is Positive. The current price of 51.68 is above the 20-day moving average (MA) of 46.11, above the 50-day MA of 44.61, and above the 200-day MA of 47.54, indicating a bullish trend. The MACD of 2.81 indicates Negative momentum. The RSI at 65.83 is Neutral, neither overbought nor oversold. The STOCH value of 93.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TREE.
Lendingtree Risk Analysis
Lendingtree disclosed 59 risk factors in its most recent earnings report. Lendingtree reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lendingtree Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $843.31M | 56.90 | 33.59% | ― | 2.71% | ― | |
64 Neutral | $14.11B | 35.91 | 8.26% | ― | 29.33% | ― | |
64 Neutral | $14.46B | 10.12 | 8.75% | 4.25% | 17.00% | -11.86% | |
60 Neutral | $744.42M | ― | -35.80% | ― | 33.86% | 66.85% | |
54 Neutral | $221.28M | ― | 1.10% | ― | 17.56% | 48.73% | |
51 Neutral | $5.17B | ― | -20.27% | ― | 24.50% | 49.38% |
* Financial Sector Average
Performance Comparison
TREE
Lendingtree
55.58
15.59
38.98%
EHTH
Ehealth
7.25
1.44
24.78%
UPST
Upstart Holdings
55.00
28.42
106.92%
OPFI
OppFi
10.74
8.41
360.94%
SOFI
SoFi Technologies
13.54
6.34
88.06%
Lendingtree Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: 28.33% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall, with strong fourth-quarter results and a robust outlook for 2025, despite some anticipated moderation in the Insurance segment growth and challenges in the credit card business.Highlights
Strong Fourth Quarter Performance
LendingTree generated $32 million of adjusted EBITDA, significantly ahead of forecast, driven by exceptional performance in the Insurance segment.
Robust Year-Over-Year Growth Across Key Segments
Homeowners insurance up 175%, home equity up 48%, small business up 45%, personal loans and auto loans up 21%, and mortgage up 12% year-over-year.
Positive Growth Outlook for 2025
Forecasting 16% annual adjusted EBITDA growth, driven by expected double-digit revenue growth across all reportable segments.
Improved Financial Position
Net leverage reduced to 3.5x trailing adjusted EBITDA, with expectations of further reduction and improved free cash flow.
SEO Revenue Growth
SEO revenue increased by 30% year-over-year in the fourth quarter.
Lowlights
Moderate Growth Expected in Insurance Segment
Growth in the Insurance segment is expected to moderate due to harder year-over-year comparisons and carriers being more diligent with marketing dollars.
Consumer Segment Challenges
Credit card business remains challenging, and while other products show growth, the credit boxes are still tight.
Company Guidance
During the LendingTree, Inc. Fourth Quarter 2024 Earnings Conference Call, the company reported a strong finish to the year with $32 million of adjusted EBITDA, surpassing forecasts. The Insurance segment was a significant contributor, showing a 175% increase in homeowners insurance revenue year-over-year, while Home and Consumer segments also experienced growth with home equity up 48%, small business up 45%, personal loans and auto loans each up 21%, and mortgage up 12%. The company anticipates continued double-digit revenue growth across these products in the first quarter of 2025. For the full year, LendingTree projects 16% growth in adjusted EBITDA at the midpoint, driven by revenue expansion across its three reportable segments. The company has focused on optimizing variable marketing and fixed costs to maintain positive operating leverage, resulting in an improved balance sheet with net leverage at 3.5x trailing adjusted EBITDA. Looking forward, LendingTree expects stable interest rates and economic growth to support demand from both consumers and lending partners, enhancing shareholder value.Lendingtree Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
LendingTree Appoints Scott Totman to Lead AI Lab
Neutral
Mar 4, 2025
On February 26, 2025, LendingTree announced that Scott Totman will transition to a new role on March 7, 2025, focusing on guiding the company’s AI efforts in its AI Lab. This move indicates a strategic emphasis on AI development, potentially impacting the company’s operations and market positioning.
Executive/Board Changes
LendingTree Extends CEO’s Employment and Increases Salary
Positive
Jan 13, 2025
LendingTree’s Board of Directors has approved an amendment to the employment agreement with CEO Douglas R. Lebda, extending his term until December 31, 2025, and increasing his base salary from $750,000 to $800,000. This decision reflects the company’s commitment to maintaining leadership stability as it continues to navigate its strategic goals.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.