Lendingtree (TREE) AI Stock Analysis

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Lendingtree

(NASDAQ:TREE)

55Neutral

LendingTree's score reflects a mixed financial outlook. Strengths include strong revenue growth and operational cash flow, but profitability issues and high leverage pose significant risks. While the earnings call provides a positive outlook with projected growth, technical indicators suggest bearish trends, and valuation concerns reflect investor caution.

Positive Factors

Diversification Strategy

Insurance advertising budgets remain healthy, and the home and consumer segments are performing well, showing that the diversified marketplace model is paying dividends.

Future Outlook

TREE also provided a solid outlook for both 1Q and FY25, calling for double-digit growth in the consumer, home, and insurance segments.

Growth and Performance

TREE established 2025 guidance with revenues and adj. EBITDA +12% Y/Y and +16% Y/Y at the midpoint, respectively.

Negative Factors

Financial Performance

TREE's 1Q results missed expectations on the top and bottom line, largely due to headwinds in the insurance vertical.

Market Concerns

There could be some NT choppiness given the heightened macro concerns.

Lendingtree (TREE) vs. S&P 500 (SPY)

Market Cap

$523.81M

Dividend YieldN/A

Average Volume (3M)443.58K

Price to Earnings (P/E)―

Beta (1Y)2.16

Revenue Growth51.96%

EPS Growth60.33%

CountryUS

Employees927

SectorFinancial

Sector Strength87

IndustryFinancial - Conglomerates

Share Statistics

EPS (TTM)-0.92

Shares Outstanding13,535,183

10 Day Avg. Volume799,710

30 Day Avg. Volume443,585

Financial Highlights & Ratios

PEG Ratio0.29

Price to Book (P/B)5.01

Price to Sales (P/S)0.00

P/FCF Ratio11.78

Enterprise Value/Market Cap1.63

Enterprise Value/Revenue0.26

Enterprise Value/Gross Profit0.91

Enterprise Value/Ebitda3.35

Forecast

1Y Price Target

$63.83

Price Target Upside62.42% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

Lendingtree Business Overview & Revenue Model

Company DescriptionLendingTree, Inc. (NASDAQ: TREE) is a leading online marketplace that connects consumers with a variety of financial products and services. Headquartered in Charlotte, North Carolina, LendingTree operates in sectors such as mortgages, personal loans, credit cards, student loans, auto loans, small business loans, and other financial products. The company provides consumers with a centralized platform to compare rates and offers from multiple lenders, facilitating informed financial decisions.

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 demonstrates strengths in generating gross profit and operational cash flow. However, the company faces profitability challenges due to negative net income and significant leverage. The financial strategy should focus on improving profitability and reducing debt to enhance financial stability.

Income Statement

Neutral

Lendingtree's revenue shows a mixed trend with a decline in recent periods, but TTM revenue indicates some recovery. The gross profit margin remains strong, showing efficient cost management. However, the company struggles with profitability, reflected in negative net income and narrow EBIT and EBITDA margins, indicating high operational costs relative to revenue.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio, indicating considerable leverage. Stockholder's equity has decreased over time, suggesting potential risk. Nevertheless, the equity ratio is adequate, and there is some asset stability. The company's financial structure warrants caution due to high liabilities relative to equity.

Cash Flow

Positive

The cash flow statement shows strong operating cash flow relative to net income, suggesting good cash generation from operations. Free cash flow is positive, and there has been free cash flow growth, but the overall cash position is challenged by significant financing outflows. Although operating cash flow supports liquidity, cash management remains crucial.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
972.18M	900.22M	672.50M	984.99M	1.10B	909.99M
	Gross Profit
934.74M	864.15M	633.74M	927.22M	1.04B	855.50M
	EBIT
30.34M	44.63M	-40.61M	-24.50M	123.50M	-1.55M
	EBITDA
75.36M	73.12M	21.86M	17.05M	60.88M	53.25M
	Net Income Common Stockholders
-55.09M	-41.70M	-122.40M	-187.95M	69.11M	-22.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
230.76M	106.59M	112.05M	298.85M	251.23M	169.93M
	Total Assets
926.70M	767.67M	802.76M	1.20B	1.30B	1.19B
	Total Debt
726.51M	544.09M	611.15M	912.76M	740.32M	703.77M
	Net Debt
495.75M	437.50M	499.10M	613.92M	489.09M	533.84M
	Total Liabilities
795.18M	658.85M	678.63M	991.37M	851.36M	824.23M
	Stockholders Equity
131.51M	108.82M	124.13M	207.94M	447.99M	364.76M
Cash Flow		Free Cash Flow
44.45M	51.04M	55.04M	31.52M	99.51M	-3.58M
	Operating Cash Flow
56.27M	62.26M	67.57M	42.97M	134.57M	38.57M
	Investing Cash Flow
-11.89M	-11.22M	-12.48M	-27.88M	10.07M	-122.15M
	Financing Cash Flow
-148.82M	-56.50M	-242.01M	32.67M	-56.96M	193.29M

Lendingtree Technical Analysis

Technical Analysis Sentiment

Negative

Last Price39.30

Price Trends

50DMA

46.50

Negative

100DMA

44.18

Negative

200DMA

47.78

Negative

Market Momentum

MACD

-2.14

Positive

RSI

40.27

Neutral

STOCH

12.58

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TREE, the sentiment is Negative. The current price of 39.3 is below the 20-day moving average (MA) of 44.99, below the 50-day MA of 46.50, and below the 200-day MA of 47.78, indicating a bearish trend. The MACD of -2.14 indicates Positive momentum. The RSI at 40.27 is Neutral, neither overbought nor oversold. The STOCH value of 12.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
EQBK	72 Outperform	$692.12M	10.03	11.84%	1.44%	40.43%	545.45%
CRD.B	66 Neutral	$538.22M	17.53	19.94%	2.76%	4.44%	33.61%
Sector *	64 Neutral	$12.73B	9.82	7.91%	17015.08%	12.18%	-5.69%
TREE	55 Neutral	$523.81M	―	-46.84%	―	51.96%	60.33%
HIPO	55 Neutral	$555.47M	―	-15.58%	―	77.44%	85.53%
LDI	48 Neutral	$374.56M	―	-29.48%	―	3.76%	16.19%
CIFR	47 Neutral	$1.17B	―	-18.49%	―	-0.65%	-808.88%

* Financial Sector Average

Performance Comparison

TREE

Lendingtree

39.30

-8.89

-18.45%

EQBK

Equity Bancshares

40.67

6.95

20.61%

LDI

loanDepot

1.12

-1.18

-51.30%

CRD.B

Crawford & Company B

10.73

2.22

26.09%

CIFR

Cipher Mining

3.15

-0.57

-15.32%

HIPO

Hippo Holdings

22.08

3.72

20.26%

Lendingtree Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -27.38%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call highlights several areas of strong growth and positive forecasts, particularly in the Insurance and Consumer segments. However, challenges remain with adjusted EBITDA falling short of expectations and legal settlements impacting financials. The Company remains optimistic about navigating these challenges with a diversified business model.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth Across All Segments

All three business segments generated solid revenue growth in the first quarter of 2025.

Insurance Segment Revenue Growth

Despite challenges, the Insurance segment grew revenue by 71% year-over-year in the first quarter.

Improvements in Small Business Lending

The Consumer segment benefited from growth in small business and personal loan products, expecting small business to generate record revenue in 2025.

Home Equity Demand Drives Growth

Increased demand for home equity loans is driving the Home segment's performance.

Strong Adjusted EBITDA Forecast

Forecasting strong adjusted EBITDA growth of 15% at the midpoint of the annual outlook.

Negative Updates

Adjusted EBITDA Below Forecast

Adjusted EBITDA came in below forecast due to temporary regulatory headwinds in the insurance business and one-time expenses related to benefits and legal fees.

Softer Insurance Performance

Disruption due to the FCC's pending one-to-one consent rule and a marketing correction led to softer insurance performance than forecasted.

Challenges in Mortgage Market

Prevailing high mortgage rates continue to suppress demand for new home buyers and refinancing.

Impact of Legal Settlement

A settlement in the Mantha vs. QuoteWizard matter resulted in a $19 million liability on the balance sheet.

Company Guidance

During the LendingTree Inc. First Quarter 2025 Earnings Conference Call, the company provided updated guidance and discussed key metrics for the year. The company experienced solid revenue growth across all three business segments, although adjusted EBITDA was slightly below forecast due to temporary regulatory challenges in the insurance business and one-time expenses. However, they remain optimistic, projecting a 15% adjusted EBITDA growth at the midpoint of their annual outlook. In the insurance segment, revenue grew by 71% year-over-year, despite lingering disruptions from regulatory changes and marketing corrections. In the lending segment, the consumer division showed strength, particularly in small business and personal loan products, with the expectation of record revenue in 2025. The home segment also performed well, driven by increased demand for home equity loans. Looking forward, the company plans to manage operating expenses through savings identified in a zero-based budgeting process, while remaining vigilant about potential macroeconomic impacts such as tariffs and interest rate fluctuations.

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.

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.