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3 High-Growth Finance Stocks to Buy as the Fed Cuts Rates Again
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The Fed’s easing cycle is starting to ripple across the financial sector, which is host to many rate-sensitive companies that are starting to benefit in the process.
Capping off the last policy meeting of the year, the Federal Reserve cut rates by another 25 basis points on Wednesday, December 10.
This lowers the benchmark federal funds rate to a new range of 3.5-3.75% after previously being at a multi-year high of 5.25-5.5%, reached in 2023 during the Fed’s aggressive tightening cycle to combat post-pandemic inflation.
The dovish policy shift has been a primary catalyst for the stock market, reducing expenses for many businesses and boosting consumer spending.
Furthermore, three finance stocks are standing out in particular with a Zacks Rank #1 (Strong Buy). In addition to their strong buy rating, these highly ranked finance stocks have an “A” Zacks Style Scores grade for Growth.
Needless to say, the growth prospects for these top finance companies may become even more appealing after the Fed’s decision to cut rates again.
Image Source: Federal Reserve Economic Data
LendingTree – TREE
Stock Price: $55
YTD Performance: +44%
Being one of the most popular online lending marketplaces, LendingTree's (TREE - Free Report) stock has been a top performer in the financial sector due to increased mortgage and loan activity, which drives more consumer traffic and lender advertising on its platform.
As a loan and financial product comparison platform that monetizes partnerships with lenders and insurers, LendingTree’s annual sales are now expected to be up 20% in fiscal 2025 and are projected to increase another 6% in FY26 to $1.15 billion.
Known for its earnings potential, LendingTree has boosted investor sentiment by exceeding earnings expectations for five consecutive quarters and posting a very impressive average EPS surprise of 75.5% in its last four quarterly reports. 50% EPS growth is now expected in FY25, with LendingTree’s bottom line projected to expand another 6% in FY26 to $5.06 per share.
Image Source: Zacks Investment Research
PJT Partners – PJT
Stock Price: $177
YTD Performance: +12%
Going public in 2015, PJT Partners (PJT - Free Report) has been one of the fastest-growing financial advisory firms and is indirectly benefiting from rate cuts as M&A activity and corporate restructuring demand are being stimulated, which are their core advisory markets.
Lower borrowing costs make it cheaper for companies to finance acquisitions, leading to an increase in deal volumes and ultimately benefiting PJT’s advisory revenues. PJT’s top line is expected to expand by double digits in FY25 and FY26, with projections edging toward $2 billion.
Notably, PJT has a strong restructuring business, and while lower rates can ease corporate debt burdens, they also encourage refinancing and balance sheet adjustments, creating advisory opportunities for these services.
As you can imagine, PJT stands out in terms of its own operational efficiency, having an exceptional free cash flow conversion rate that’s over 200% and respectable ROIC (Return on Invested Capital) at around 20%. Plus, PJT has been highly profitable, with EPS expected to spike 36% this year and projected to leap another 17% in FY26 to $8.00.
Image Source: Zacks Investment Research
NerdWallet – NRDS
Stock Price: $14
YTD Performance: +11%
Like LendingTree, NerdWallet (NRDS - Free Report) is benefiting from increased consumer activity in mortgages, refinancing, and personal loans. Earning revenue through partnerships with lenders who advertise on its platform, NerdWallet has become more advantageous for advertisements as a personal finance guidance and product marketplace focused on helping consumers and small businesses navigate financial choices.
NerdWallet's annual sales projections are climbing toward $1billion, with a 20% uptick expected in FY25 and a 7% increase projected in FY26. More importantly, NerdWallet is starting to blow past the probability line since going public in 2021, with EPS now expected at $0.62 in FY25 compared to an adjusted loss of -$0.10 a share last year. Even better, FY26 EPS is projected to soar to $0.93.
Reassuringly, NerdWallet most recently crushed Q3 EPS expectations in November, with earnings at $0.34 per share compared to estimates of $0.20. Following the impressive beat, earnings estimate revisions have ripped higher in the last 60 days.
Image Source: Zacks Investment Research
Bottom Line
These highly ranked finace stocks are setup to be prime beneficiaries of the Fed’s easing cycle with now appearing to be an ideal time to buy as they are experiencing a favorable operating environment, belonging to sub industries that are in the upper percentile of over 240 Zacks industries.
In regard to their overall Zacks Style Scores grade, LendingTree and NerdWallet check an “A” for the combination of Value, Growth, and Momentum with PJT Partners sporting a “B”.
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3 High-Growth Finance Stocks to Buy as the Fed Cuts Rates Again
The Fed’s easing cycle is starting to ripple across the financial sector, which is host to many rate-sensitive companies that are starting to benefit in the process.
Capping off the last policy meeting of the year, the Federal Reserve cut rates by another 25 basis points on Wednesday, December 10.
This lowers the benchmark federal funds rate to a new range of 3.5-3.75% after previously being at a multi-year high of 5.25-5.5%, reached in 2023 during the Fed’s aggressive tightening cycle to combat post-pandemic inflation.
The dovish policy shift has been a primary catalyst for the stock market, reducing expenses for many businesses and boosting consumer spending.
Furthermore, three finance stocks are standing out in particular with a Zacks Rank #1 (Strong Buy). In addition to their strong buy rating, these highly ranked finance stocks have an “A” Zacks Style Scores grade for Growth.
Needless to say, the growth prospects for these top finance companies may become even more appealing after the Fed’s decision to cut rates again.
Image Source: Federal Reserve Economic Data
LendingTree – TREE
Stock Price: $55
YTD Performance: +44%
Being one of the most popular online lending marketplaces, LendingTree's (TREE - Free Report) stock has been a top performer in the financial sector due to increased mortgage and loan activity, which drives more consumer traffic and lender advertising on its platform.
As a loan and financial product comparison platform that monetizes partnerships with lenders and insurers, LendingTree’s annual sales are now expected to be up 20% in fiscal 2025 and are projected to increase another 6% in FY26 to $1.15 billion.
Known for its earnings potential, LendingTree has boosted investor sentiment by exceeding earnings expectations for five consecutive quarters and posting a very impressive average EPS surprise of 75.5% in its last four quarterly reports. 50% EPS growth is now expected in FY25, with LendingTree’s bottom line projected to expand another 6% in FY26 to $5.06 per share.
Image Source: Zacks Investment Research
PJT Partners – PJT
Stock Price: $177
YTD Performance: +12%
Going public in 2015, PJT Partners (PJT - Free Report) has been one of the fastest-growing financial advisory firms and is indirectly benefiting from rate cuts as M&A activity and corporate restructuring demand are being stimulated, which are their core advisory markets.
Lower borrowing costs make it cheaper for companies to finance acquisitions, leading to an increase in deal volumes and ultimately benefiting PJT’s advisory revenues. PJT’s top line is expected to expand by double digits in FY25 and FY26, with projections edging toward $2 billion.
Notably, PJT has a strong restructuring business, and while lower rates can ease corporate debt burdens, they also encourage refinancing and balance sheet adjustments, creating advisory opportunities for these services.
As you can imagine, PJT stands out in terms of its own operational efficiency, having an exceptional free cash flow conversion rate that’s over 200% and respectable ROIC (Return on Invested Capital) at around 20%. Plus, PJT has been highly profitable, with EPS expected to spike 36% this year and projected to leap another 17% in FY26 to $8.00.
Image Source: Zacks Investment Research
NerdWallet – NRDS
Stock Price: $14
YTD Performance: +11%
Like LendingTree, NerdWallet (NRDS - Free Report) is benefiting from increased consumer activity in mortgages, refinancing, and personal loans. Earning revenue through partnerships with lenders who advertise on its platform, NerdWallet has become more advantageous for advertisements as a personal finance guidance and product marketplace focused on helping consumers and small businesses navigate financial choices.
NerdWallet's annual sales projections are climbing toward $1billion, with a 20% uptick expected in FY25 and a 7% increase projected in FY26. More importantly, NerdWallet is starting to blow past the probability line since going public in 2021, with EPS now expected at $0.62 in FY25 compared to an adjusted loss of -$0.10 a share last year. Even better, FY26 EPS is projected to soar to $0.93.
Reassuringly, NerdWallet most recently crushed Q3 EPS expectations in November, with earnings at $0.34 per share compared to estimates of $0.20. Following the impressive beat, earnings estimate revisions have ripped higher in the last 60 days.
Image Source: Zacks Investment Research
Bottom Line
These highly ranked finace stocks are setup to be prime beneficiaries of the Fed’s easing cycle with now appearing to be an ideal time to buy as they are experiencing a favorable operating environment, belonging to sub industries that are in the upper percentile of over 240 Zacks industries.
In regard to their overall Zacks Style Scores grade, LendingTree and NerdWallet check an “A” for the combination of Value, Growth, and Momentum with PJT Partners sporting a “B”.