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LendingTree (TREE) Stock Up on Better-Than-Expected Q1 Earnings

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LendingTree (TREE - Free Report) reported adjusted earnings per share of 46 cents in first-quarter 2022, better than the Zacks Consensus Estimate of 10 cents. The reported figure compares favorably with an income of 18 cents reported in the prior-year quarter.

While elevated expenses were a spoilsport, recovery in the company’s consumer segment business buoyed the results. The company also provided an encouraging 2022 guidance. Probably mirroring this, shares of the company rallied 4.9% following the release of the first-quarter 2022 results.

LendingTree reported a net loss from continuing operations of $10.8 million or 84 cents per share against net income of $19.3 million or $1.37 per share reported in the year-ago quarter.

Revenues Jump, Expenses Rise

Total revenues grew 4% year over year to $283.2 million in the first quarter. The upside primarily stemmed from higher Consumer segments revenues. However, the reported figure missed the Zacks Consensus Estimate of $285.4 million.

Total costs and expenses were $286.1 million, up 4.2% from the prior-year quarter. The upswing chiefly resulted from a rise in selling and marketing expenses, and general and administrative expenses.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $29.4 million, down 4% year over year. The variable marketing margin was at $94.1 million, up 6% year over year.

As of Mar 31, 2022, cash and cash equivalents were $196.7 million, down from $251.2 million as of Dec 31, 2021. Long-term debt was $565 million, up from the prior-quarter figure of $478.2 million. Total shareholders' equity, as of Mar 31, 2022, was around $340.8 million, down from $448 million, sequentially.

Outlook

For second-quarter 2022, total revenues are estimated to be $283-$293 million. Adjusted EBITDA and the variable marketing margin are anticipated to be $35-$40 million and $100-$106 million, respectively.

For 2022, total revenues are estimated to be $1,150-$1,190 million, indicating year-over-year growth of 5-8%. Adjusted EBITDA is anticipated to be $140-$150 million, suggesting a 4-11% rise from the reported figure in 2021. The variable marketing margin is expected to be $390-$415 million.

Conclusion

LendingTree’s declining dependence on mortgage-related revenue sources and various acquisitions over the past several years is likely to continue aiding financials and help diversify revenues. However, a rise in expenses is a near-term headwind.

LendingTree, Inc. Price, Consensus and EPS Surprise

LendingTree, Inc. Price, Consensus and EPS Surprise

LendingTree, Inc. price-consensus-eps-surprise-chart | LendingTree, Inc. Quote

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

First Horizon National Corporation’s (FHN - Free Report) first-quarter 2022 adjusted earnings per share of 38 cents beat the Zacks Consensus Estimate of 34 cents. However, the figure declined 25% year over year. Results excluded after-tax impacts of 4 cents per share from notable items related to the IBERIABANK Corporation and TD-Bank merger transactions.

First Horizon’s results reflect higher loan balance, provision benefits and declining expenses. However, declines in net interest income (“NII”) and fee income affected revenues. Also, pressure on margin due to low interest rates was a spoilsport for FHN.

M&T Bank Corporation (MTB - Free Report) reported net operating earnings per share of $2.73 in first-quarter 2022, surpassing the Zacks Consensus Estimate of $2.26. However, MTB’s bottom line compares unfavorably with $3.41 per share reported in the year-ago period.

A rise in non-interest income and a strong capital position were tailwinds for M&T Bank. However, a fall in NII and net interest margin, and a rise in expenses were the key undermining factors.

Fifth Third Bancorp (FITB - Free Report) reported first-quarter 2022 earnings (excluding after-tax impacts of certain items) of 69 cents per share, missing the Zacks Consensus Estimate of 70 cents. Including the impacts of these items, earnings per share were 68 cents, indicating a 27% year-over-year decline.

Fifth Third’s performance displays a revenue decline, primarily due to a fall in fee income. Margin contraction and the deterioration of capital position played spoilsports for FITB.