LendingTree (TREE - Free Report) reported a negative earnings surprise of 12.7% in first-quarter 2019. Adjusted net income per share of $1.10 lagged the Zacks Consensus Estimate of $1.26. However, the figure comes in line with the prior-year quarter's reported tally.
The company’s results reflected rise in expenses. However, higher revenues, with major contribution from non-mortgage products revenues, were a tailwind. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. All these positives raised investors’ optimism leading to 5.78% rise in shares of LendingTree, following the release.
The company reported GAAP net income of $0.6 million or 4 cents per share compared with $35.9 million or $2.41 in the year-ago quarter.
Revenue Growth Partially Offset by Higher Expenses
Total revenues soared 45% year over year to $262.4 million in the first quarter. This upside primarily stemmed from higher non-mortgage product revenues, partly mitigated by lower mortgage revenues. Further, the reported figure outpaced the Zacks Consensus Estimate of $239 million.
Total costs and expenses came in at $264.2 million, flaring up 59.4% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost.
Adjusted EBITDA totaled $43 million, up 36% from $31.7 million reported in the prior-year quarter.
As of Mar 31, 2019, cash and cash equivalents were $65 million, down nearly 38.5% from Dec 31, 2018. Long-term debt inched up 1.3% from the prior-year end to $254.2 million. Total shareholders' equity was $352.2 million, up 1.7% from the Dec 31, 2018 level.
Outlook
Concurrent with the first-quarter results, management provided second-quarter 2019 guidance, as well as revised its full-year 2019 estimates.
Second-Quarter 2019
- Total revenues projected at $260-$270 million.
- Adjusted EBITDA estimated in the $45-$47 million band.
- Variable Marketing Margin is projected at $92-$97 million.
Full-Year 2019
- Total revenues of $1,060-$1,090 million predicted, up from the previous projection of $1,010-$1,045 million.
- Adjusted EBITDA anticipated in the $210-$220 million band, up from the prior forecast of $205-$215 million.
- Variable Marketing Margin is projected at $400-$415 million, up from the prior estimate of $385-$400 million.
Conclusion
LendingTree put up a decent performance during the January-March period as compared to the prior-year period. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the continued rise in 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.
Currently, LendingTree carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
BOK Financial (BOKF - Free Report) delivered a positive earnings surprise of 5.5% in the March-end 2019. Earnings per share of $1.54 outpaced the Zacks Consensus Estimate of $1.46. The bottom line, however, compared unfavorably with the prior-year quarter’s reported tally of $1.61. Results include certain one-time items.
People's United Financial Inc. recorded first-quarter operating earnings of 33 cents per share, in line with the Zacks Consensus Estimate. The reported figure improved 10%, year over year.
Riding on higher revenues, Citizens Financial Group, Inc. (CFG - Free Report) delivered a positive earnings surprise of 4.5% in first-quarter 2019. Adjusted earnings per share came in at 93 cents, beating the Zacks Consensus Estimate of 89 cents. Also, the reported figure improved 19.2% year over year. Results excluded one-time items of $4 million or 1 cent per share.
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LendingTree (TREE - Free Report) reported a negative earnings surprise of 12.7% in first-quarter 2019. Adjusted net income per share of $1.10 lagged the Zacks Consensus Estimate of $1.26. However, the figure comes in line with the prior-year quarter's reported tally.
The company’s results reflected rise in expenses. However, higher revenues, with major contribution from non-mortgage products revenues, were a tailwind. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. All these positives raised investors’ optimism leading to 5.78% rise in shares of LendingTree, following the release.
The company reported GAAP net income of $0.6 million or 4 cents per share compared with $35.9 million or $2.41 in the year-ago quarter.
Revenue Growth Partially Offset by Higher Expenses
Total revenues soared 45% year over year to $262.4 million in the first quarter. This upside primarily stemmed from higher non-mortgage product revenues, partly mitigated by lower mortgage revenues. Further, the reported figure outpaced the Zacks Consensus Estimate of $239 million.
Total costs and expenses came in at $264.2 million, flaring up 59.4% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost.
Adjusted EBITDA totaled $43 million, up 36% from $31.7 million reported in the prior-year quarter.
As of Mar 31, 2019, cash and cash equivalents were $65 million, down nearly 38.5% from Dec 31, 2018. Long-term debt inched up 1.3% from the prior-year end to $254.2 million. Total shareholders' equity was $352.2 million, up 1.7% from the Dec 31, 2018 level.
Outlook
Concurrent with the first-quarter results, management provided second-quarter 2019 guidance, as well as revised its full-year 2019 estimates.
Second-Quarter 2019
Full-Year 2019
Conclusion
LendingTree put up a decent performance during the January-March period as compared to the prior-year period. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the continued rise in 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.
Currently, LendingTree carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
BOK Financial (BOKF - Free Report) delivered a positive earnings surprise of 5.5% in the March-end 2019. Earnings per share of $1.54 outpaced the Zacks Consensus Estimate of $1.46. The bottom line, however, compared unfavorably with the prior-year quarter’s reported tally of $1.61. Results include certain one-time items.
People's United Financial Inc. recorded first-quarter operating earnings of 33 cents per share, in line with the Zacks Consensus Estimate. The reported figure improved 10%, year over year.
Riding on higher revenues, Citizens Financial Group, Inc. (CFG - Free Report) delivered a positive earnings surprise of 4.5% in first-quarter 2019. Adjusted earnings per share came in at 93 cents, beating the Zacks Consensus Estimate of 89 cents. Also, the reported figure improved 19.2% year over year. Results excluded one-time items of $4 million or 1 cent per share.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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