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LendingTree (TREE) Q1 Earnings Top Estimates on Solid Revenues

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LendingTree (TREE - Free Report) reported first-quarter 2020 adjusted net income per share of $1.20, beating the Zacks Consensus Estimate of $1.09. Further, the figure comes in higher than the prior-year quarter’s $1.10 per share.

The company’s results were aided by higher revenues and lower expenses. Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. However, investors’ concerns highlighted reducing consumer revenues on coronavirus woes, resulting in a share-price decline of 4.6% following the earnings release.

The company reported GAAP net income of $19 million or $1.34 per share compared with the $0.6 million or 4 cents recorded in the year-ago quarter.

Revenues Climb, Costs Decline

Total revenues jumped 7.9% year over year to $283.1 million in the first quarter of 2020. This upside primarily stemmed from higher home and insurance revenues, partly offset by lower consumer and other revenues. The reported figure also surpassed the Zacks Consensus Estimate of $282.5 million.

Total costs and expenses came in at $262.3 million, slightly down from the prior-year quarter. This decline primarily resulted from fall in cost of revenues.

Adjusted EBITDA totaled $44.9 million, up 4.4% from the $43 million reported in the prior-year quarter. Variable marketing margin was $98.2 million, up 6% year over year.

As of Mar 31, 2020, cash and cash equivalents were $51.2 million, declining nearly 15% from Dec 31, 2019. Long-term debt inched up 1.3% from the prior-year end to $267.9 million. Total shareholders' equity was $423.6 million, up 5.3% from the Dec 31, 2018 level.

Outlook

Concurrent with the March-end quarter results, management issued second-quarter 2020 estimates.

Second-Quarter 2020

  • Total revenues of $160-$175 million projected.
  • Adjusted EBITDA anticipated in the $12-$18 million band.
  • Variable Marketing Margin projected at $65-$75 million.

Conclusion

LendingTree put up a decent performance during the January-March period. The company’s expansion strategy for its non-mortgage business seems to be working well. This apart, the bank’s commitment to diversify product offerings beyond mortgage-related products augurs well for the long haul.

Nevertheless, reduction in cash and rising debt level remain concerns.
 

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

Synovus Financial (SNV - Free Report) reported first-quarter 2020 adjusted earnings of 21 cents per share, missing the Zacks Consensus Estimate of 31 cents. Also, the reported figure came in 79% lower than the prior-year quarter tally.

Evercore (EVR - Free Report) delivered adjusted earnings per share of $1.21, outpacing the Zacks Consensus Estimate of $1.03 in the first quarter. However, results were down 27% from the prior-year quarter’s $1.66 per share.

TCF Financial Corporation (TCF - Free Report) posted first-quarter 2020 adjusted earnings per share of 57 cents, beating the Zacks Consensus Estimate of 35 cents. Nonetheless, the figure plunged 45.2% from the prior quarter.

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