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LendingTree (TREE) Up 24.2% as Q3 Earnings Beat on Revenues
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Shares of LendingTree (TREE - Free Report) stupendously gained 24.2% following the release of its third-quarter 2018 results. The company reported adjusted net income per share of $1.92, surpassing the Zacks Consensus Estimate of $1.78. The figure compares favorably with the prior-year quarter’s tally of $1.17.
The company’s results primarily benefited from higher revenues, with major contribution from non-mortgage products revenues. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, flaring up expenses was a major headwind.
The company reported GAAP net income of $28.4 million or $2.05 per share compared with $10.1 million or 74 cents in the year-ago quarter.
Rise in Revenues Partially Offset by Higher Expenses
Total revenues grew 15% year over year to $197.1 million. The rise primarily stemmed from higher non-mortgage product revenues. However, it lagged the Zacks Consensus estimate of $200.1 million.
Total costs and expenses were $176.8 million, up 14.8% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost. However, lower litigation settlements and contingencies was a mitigating factor amid rise of all expenses.
Adjusted EBITDA totaled $45.3 million, up 31% from $34.7 million reported in the prior-year quarter.
As of Sep 30, 2018, cash and cash equivalents were $265.2 million, down nearly 28.1% from Dec 31, 2017. Long-term debt climbed 4% from the year-end to $247.7 million. Total shareholders' equity was $376.5 million, up 27.7% from the Dec 31, 2017 level.
Capital Deployment Activity
During the reported quarter, the company repurchased 49,000 shares of its common stock at a weighted-average price of $230 per share for a total cost of $11.2 million.
Outlook
Concurrent with the third-quarter results, including two months' impact from the QuoteWizard acquisition, management provided revised full-year 2018 estimates.
Full-Year 2018
• Total revenues of $765-$775 million, up from the previous projection of $745-$765 million.
• Adjusted EBITDA in the $152-$155 million band, up from the previous projection of $148-$152 million. This represents growth of 32-35% year over year.
• Variable Marketing Margin is projected at $283-$288 million, up from the prior estimate of $275-$285 million.
Conclusion
Lending Tree put up an impressive performance during the Jul-Sep period. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the continued rise in its 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.
LendingTree, Inc. Price, Consensus and EPS Surprise
Among other stocks in the same industry, TPG Specialty Lending, Inc. (TSLX - Free Report) is scheduled to release third-quarter earnings on Nov 6, while Ellington Financial LLC (EFC - Free Report) and Essent Group Ltd. (ESNT - Free Report) will release their quarterly numbers on Nov 7 and Nov 9, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
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LendingTree (TREE) Up 24.2% as Q3 Earnings Beat on Revenues
Shares of LendingTree (TREE - Free Report) stupendously gained 24.2% following the release of its third-quarter 2018 results. The company reported adjusted net income per share of $1.92, surpassing the Zacks Consensus Estimate of $1.78. The figure compares favorably with the prior-year quarter’s tally of $1.17.
The company’s results primarily benefited from higher revenues, with major contribution from non-mortgage products revenues. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, flaring up expenses was a major headwind.
The company reported GAAP net income of $28.4 million or $2.05 per share compared with $10.1 million or 74 cents in the year-ago quarter.
Rise in Revenues Partially Offset by Higher Expenses
Total revenues grew 15% year over year to $197.1 million. The rise primarily stemmed from higher non-mortgage product revenues. However, it lagged the Zacks Consensus estimate of $200.1 million.
Total costs and expenses were $176.8 million, up 14.8% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost. However, lower litigation settlements and contingencies was a mitigating factor amid rise of all expenses.
Adjusted EBITDA totaled $45.3 million, up 31% from $34.7 million reported in the prior-year quarter.
As of Sep 30, 2018, cash and cash equivalents were $265.2 million, down nearly 28.1% from Dec 31, 2017. Long-term debt climbed 4% from the year-end to $247.7 million. Total shareholders' equity was $376.5 million, up 27.7% from the Dec 31, 2017 level.
Capital Deployment Activity
During the reported quarter, the company repurchased 49,000 shares of its common stock at a weighted-average price of $230 per share for a total cost of $11.2 million.
Outlook
Concurrent with the third-quarter results, including two months' impact from the QuoteWizard acquisition, management provided revised full-year 2018 estimates.
Full-Year 2018
• Total revenues of $765-$775 million, up from the previous projection of $745-$765 million.
• Adjusted EBITDA in the $152-$155 million band, up from the previous projection of $148-$152 million. This represents growth of 32-35% year over year.
• Variable Marketing Margin is projected at $283-$288 million, up from the prior estimate of $275-$285 million.
Conclusion
Lending Tree put up an impressive performance during the Jul-Sep period. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the continued rise in its 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.
LendingTree, Inc. Price, Consensus and EPS Surprise
LendingTree, Inc. Price, Consensus and EPS Surprise | 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.
Among other stocks in the same industry, TPG Specialty Lending, Inc. (TSLX - Free Report) is scheduled to release third-quarter earnings on Nov 6, while Ellington Financial LLC (EFC - Free Report) and Essent Group Ltd. (ESNT - Free Report) will release their quarterly numbers on Nov 7 and Nov 9, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>