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Tree.com (TREE) Down 22.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Tree.com (TREE - Free Report) . Shares have lost about 22.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tree.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
LendingTree reported an adjusted net income per share of 38 cents in the fourth quarter of 2022. The Zacks Consensus Estimate was pegged at a loss of 27 cents. The reported figure compares favorably with an adjusted net loss of 31 cents reported in the prior-year quarter.
The company’s results were aided by lower costs, while a decline in revenues was a spoilsport. LendingTree provided encouraging 2023 guidance.
The company reported a net loss from continuing operations of $10.4 million or 81 cents per share against an income of $48.4 million or $3.67 per share reported in the year-ago quarter.
For 2022, adjusted net income per share was $1.07, which declined from $1.40 reported in the prior year.
Revenues Decline, Expenses Fall
Total revenues declined 21.8% year over year to $202.1 million in the fourth quarter. The downside was primarily stemmed from a decline in Home and Consumer segments’ revenues. Also, the reported figure missed the Zacks Consensus Estimate of $206.4 million.
For 2022, total revenues of $985 million decreased 10.3% year over year.
The total cost of revenues was $13.5 million, down 4.1% from the prior-year quarter. Also, there was a decline in all components of expenses except restructuring and severance, interest expenses as well as litigation settlements and contingencies expenses.
In 2022, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $84.5 million, down 37.3% year over year. The variable marketing margin was at $337.7 million, down 11.6%.
As of Dec 31, 2022, cash and cash equivalents were $298.8 million, up 19% year over year. Long-term debt was $813.5 million, up 70.1%. Total shareholders' equity was $207.9 million, down 53.6%.
Outlook
First-Quarter 2023
Total revenues are estimated to be between $200 million and $210 million.
Adjusted EBITDA and the variable marketing margin are anticipated in the range of $11-$16 million and $76-$81 million, respectively.
2023
Management expects total revenues to be between $935 million and $985 million. This represents a decline of 0 in total compared to 2022.
Adjusted EBITDA is anticipated to be in the range of $85-$95 million. This represents an increase of 1-12% from 2022.
The variable marketing margin is expected to be between $325 million and $350 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.84% due to these changes.
VGM Scores
At this time, Tree.com has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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) Down 22.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Tree.com (TREE - Free Report) . Shares have lost about 22.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tree.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
LendingTree Q4 Earnings Beat Estimates, Revenues Decline
LendingTree reported an adjusted net income per share of 38 cents in the fourth quarter of 2022. The Zacks Consensus Estimate was pegged at a loss of 27 cents. The reported figure compares favorably with an adjusted net loss of 31 cents reported in the prior-year quarter.
The company’s results were aided by lower costs, while a decline in revenues was a spoilsport. LendingTree provided encouraging 2023 guidance.
The company reported a net loss from continuing operations of $10.4 million or 81 cents per share against an income of $48.4 million or $3.67 per share reported in the year-ago quarter.
For 2022, adjusted net income per share was $1.07, which declined from $1.40 reported in the prior year.
Revenues Decline, Expenses Fall
Total revenues declined 21.8% year over year to $202.1 million in the fourth quarter. The downside was primarily stemmed from a decline in Home and Consumer segments’ revenues. Also, the reported figure missed the Zacks Consensus Estimate of $206.4 million.
For 2022, total revenues of $985 million decreased 10.3% year over year.
The total cost of revenues was $13.5 million, down 4.1% from the prior-year quarter. Also, there was a decline in all components of expenses except restructuring and severance, interest expenses as well as litigation settlements and contingencies expenses.
In 2022, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $84.5 million, down 37.3% year over year. The variable marketing margin was at $337.7 million, down 11.6%.
As of Dec 31, 2022, cash and cash equivalents were $298.8 million, up 19% year over year. Long-term debt was $813.5 million, up 70.1%. Total shareholders' equity was $207.9 million, down 53.6%.
Outlook
First-Quarter 2023
Total revenues are estimated to be between $200 million and $210 million.
Adjusted EBITDA and the variable marketing margin are anticipated in the range of $11-$16 million and $76-$81 million, respectively.
2023
Management expects total revenues to be between $935 million and $985 million. This represents a decline of 0 in total compared to 2022.
Adjusted EBITDA is anticipated to be in the range of $85-$95 million. This represents an increase of 1-12% from 2022.
The variable marketing margin is expected to be between $325 million and $350 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -7.84% due to these changes.
VGM Scores
At this time, Tree.com has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.