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Tree.com (TREE) Up 17.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Tree.com (TREE - Free Report) . Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tree.com due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
LendingTree reported first-quarter 2020 adjusted net income per share of $1.20, beating the Zacks Consensus Estimate of $1.09. Further, the figure comes in higher than the prior-year quarter’s $1.10 per share.
The company’s results were aided by higher revenues and lower expenses. Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, reducing consumer revenues on coronavirus woes were on downside.
The company reported GAAP net income of $19 million or $1.34 per share compared with the $0.6 million or 4 cents recorded in the year-ago quarter.
Revenues Climb, Costs Decline
Total revenues jumped 7.9% year over year to $283.1 million in the first quarter of 2020. This upside primarily stemmed from higher home and insurance revenues, partly offset by lower consumer and other revenues. The reported figure also surpassed the Zacks Consensus Estimate of $282.5 million.
Total costs and expenses came in at $262.3 million, slightly down from the prior-year quarter. This decline primarily resulted from fall in cost of revenues.
Adjusted EBITDA totaled $44.9 million, up 4.4% from the $43 million reported in the prior-year quarter. Variable marketing margin was $98.2 million, up 6% year over year.
As of Mar 31, 2020, cash and cash equivalents were $51.2 million, declining nearly 15% from Dec 31, 2019. Long-term debt inched up 1.3% from the prior-year end to $267.9 million. Total shareholders' equity was $423.6 million, up 5.3% from the Dec 31, 2018 level.
Outlook
Concurrent with the March-end quarter results, management issued second-quarter 2020 estimates.
Second-Quarter 2020
Total revenues of $160-$175 million projected.
Adjusted EBITDA anticipated in the $12-$18 million band.
Variable Marketing Margin projected at $65-$75 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -96.05% due to these changes.
VGM Scores
At this time, Tree.com has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Tree.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Tree.com (TREE) Up 17.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Tree.com (TREE - Free Report) . Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Tree.com due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
LendingTree Q1 Earnings Beat Estimates, Revenues Escalate
LendingTree reported first-quarter 2020 adjusted net income per share of $1.20, beating the Zacks Consensus Estimate of $1.09. Further, the figure comes in higher than the prior-year quarter’s $1.10 per share.
The company’s results were aided by higher revenues and lower expenses. Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, reducing consumer revenues on coronavirus woes were on downside.
The company reported GAAP net income of $19 million or $1.34 per share compared with the $0.6 million or 4 cents recorded in the year-ago quarter.
Revenues Climb, Costs Decline
Total revenues jumped 7.9% year over year to $283.1 million in the first quarter of 2020. This upside primarily stemmed from higher home and insurance revenues, partly offset by lower consumer and other revenues. The reported figure also surpassed the Zacks Consensus Estimate of $282.5 million.
Total costs and expenses came in at $262.3 million, slightly down from the prior-year quarter. This decline primarily resulted from fall in cost of revenues.
Adjusted EBITDA totaled $44.9 million, up 4.4% from the $43 million reported in the prior-year quarter. Variable marketing margin was $98.2 million, up 6% year over year.
As of Mar 31, 2020, cash and cash equivalents were $51.2 million, declining nearly 15% from Dec 31, 2019. Long-term debt inched up 1.3% from the prior-year end to $267.9 million. Total shareholders' equity was $423.6 million, up 5.3% from the Dec 31, 2018 level.
Outlook
Concurrent with the March-end quarter results, management issued second-quarter 2020 estimates.
Second-Quarter 2020
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -96.05% due to these changes.
VGM Scores
At this time, Tree.com has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Tree.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.