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LendingTree (TREE) Up 3.1% as Q2 Earnings Beat on Revenues
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Shares of LendingTree (TREE - Free Report) gained 3.1% following the release of second-quarter 2018 results. The company reported adjusted net income per share of $1.47, surpassing the Zacks Consensus Estimate of $1.25. The figure compares favorably with the prior-year quarter’s income of 90 cents.
The company’s results primarily benefited from higher revenues, with major contribution from non-mortgage products revenues. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, flaring up expenses was a major headwind.
The company reported GAAP net income of $42.5 million or $3.01 per share compared with $7.3 million or 54 cents in the year-ago quarter.
Rise in Revenues Partially Offset by Higher Expenses
Total revenues grew 20% year over year to $184.1 million. The rise primarily stemmed from higher non-mortgage product revenues.
Total costs and expenses were $166 million, up 15.4% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost. However, fair value change of contingent consideration came in negative, which was a mitigating factor amid the increase of all expenses.
Adjusted EBITDA totaled $37.1 million, up 37% from $27 million reported in the prior-year quarter.
As of Jun 30, 2018, cash and cash equivalents were $293.3 million, down nearly 15.3% from the prior quarter. Long-term debt inched up 1.3% sequentially to $244.8 million. Total shareholders' equity was $347.4 million, up 5.3% from the Mar 31, 2018 level.
Outlook
Concurrent with the Q2 results, management provided guidance for third-quarter 2018 and revised its full-year 2018 estimates.
Third-Quarter 2018
• Total revenues in the range of $195-$205 million.
• Adjusted EBITDA in the range of $43-$46 million. The guidance reflects an estimated $0.5-$1.5 million of expense related to payroll taxes owed upon the exercise of employee stock options and vesting of restricted stock units.
• Variable Marketing Margin is anticipated to be $76-$81 million.
Full-Year 2018
• Total revenues of $745-$765 million, down from the previous projection of $770-$790 million.
• Adjusted EBITDA in the $148-$152 million band, up from the previous projection of $145-$150 million.
• Variable Marketing Margin is projected at $275-$285 million, up from the prior estimate of $270-$280 million.
Conclusion
Lending Tree put up an impressive second-quarter performance. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the consistent rise in its non mortgage revenues. Also, LendingTree’s commitment to diversify product offerings beyond mortgage-related products augurs well for the long term.
Nevertheless, escalating expenses remain a concern.
LendingTree, Inc. Price, Consensus and EPS Surprise
Among other stocks in the same industry, TPG Specialty Lending, Inc. (TSLX - Free Report) is scheduled to release second-quarter earnings on Aug 1, while PennyMac Financial Services, Inc. (PFSI - Free Report) and Essent Group Ltd. (ESNT - Free Report) will release their quarterly numbers on Aug 2 and Aug 3, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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LendingTree (TREE) Up 3.1% as Q2 Earnings Beat on Revenues
Shares of LendingTree (TREE - Free Report) gained 3.1% following the release of second-quarter 2018 results. The company reported adjusted net income per share of $1.47, surpassing the Zacks Consensus Estimate of $1.25. The figure compares favorably with the prior-year quarter’s income of 90 cents.
The company’s results primarily benefited from higher revenues, with major contribution from non-mortgage products revenues. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, flaring up expenses was a major headwind.
The company reported GAAP net income of $42.5 million or $3.01 per share compared with $7.3 million or 54 cents in the year-ago quarter.
Rise in Revenues Partially Offset by Higher Expenses
Total revenues grew 20% year over year to $184.1 million. The rise primarily stemmed from higher non-mortgage product revenues.
Total costs and expenses were $166 million, up 15.4% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost. However, fair value change of contingent consideration came in negative, which was a mitigating factor amid the increase of all expenses.
Adjusted EBITDA totaled $37.1 million, up 37% from $27 million reported in the prior-year quarter.
As of Jun 30, 2018, cash and cash equivalents were $293.3 million, down nearly 15.3% from the prior quarter. Long-term debt inched up 1.3% sequentially to $244.8 million. Total shareholders' equity was $347.4 million, up 5.3% from the Mar 31, 2018 level.
Outlook
Concurrent with the Q2 results, management provided guidance for third-quarter 2018 and revised its full-year 2018 estimates.
Third-Quarter 2018
• Total revenues in the range of $195-$205 million.
• Adjusted EBITDA in the range of $43-$46 million. The guidance reflects an estimated $0.5-$1.5 million of expense related to payroll taxes owed upon the exercise of employee stock options and vesting of restricted stock units.
• Variable Marketing Margin is anticipated to be $76-$81 million.
Full-Year 2018
• Total revenues of $745-$765 million, down from the previous projection of $770-$790 million.
• Adjusted EBITDA in the $148-$152 million band, up from the previous projection of $145-$150 million.
• Variable Marketing Margin is projected at $275-$285 million, up from the prior estimate of $270-$280 million.
Conclusion
Lending Tree put up an impressive second-quarter performance. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the consistent rise in its non mortgage revenues. Also, LendingTree’s commitment to diversify product offerings beyond mortgage-related products augurs well for the long term.
Nevertheless, escalating expenses remain a concern.
LendingTree, Inc. Price, Consensus and EPS Surprise
LendingTree, Inc. Price, Consensus and EPS Surprise | LendingTree, Inc. Quote
Lending Tree currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other stocks in the same industry, TPG Specialty Lending, Inc. (TSLX - Free Report) is scheduled to release second-quarter earnings on Aug 1, while PennyMac Financial Services, Inc. (PFSI - Free Report) and Essent Group Ltd. (ESNT - Free Report) will release their quarterly numbers on Aug 2 and Aug 3, respectively.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>