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LendingTree, Inc. Message Board

  • crotchshot crotchshot Jan 3, 2003 2:46 AM Flag

    Riskreward2 and Random...part 2

    Guidance going forward:

    TREE is raising guidance due to expanded capacity and increase of adoption (of TREE) rates..

    4Q 02 guidance has gone from 3 cents to 10 cents to AT LEAST 18 cents...

    TREE projected 2003:
    Revenue $131 M
    Net Inc $11 M
    EPS 40 cents in the following breakdown:
    1Q 7 cents
    2Q 9 cents
    3Q 11 cents
    4Q 13 cents

    it was stated on the conf call that the net income is increasing 130% while revenue is increasing only 25% (I did not verify this, but if it is true that would display some high efficiency)...

    these projections are NOT due to an anticipated continuation of the present refi market...in the 3Q of this year, refi's represented 77% of the revenue...in the 4Q it is projected to be 60%...in 1Q 03, it is projected to be 35% (a return to "normalcy" in the refi market conditions)...

    ok...more in part 3

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    • i lend little or no value for guidance from this company when it comes to a 'normal' environment since they have not operated in one yet... pure speculation.

      #'s, i am sure they are accurate, thus no comment.

      4Q02... of course, look at the market, the mortgage industry is littered with trained chimps that are making 6 figures, EVERYONE is making money because rates are low.

      efficiency... true, as mentioned in previous post, if lt can increase volume, they can have higher net profit... they would NEVER need to add staff/overhead regardless of the volume... the majority of the people (highest %) are in sales/retention... trying to keep existing brokers from dropping out and selling new ones to replace those that do... lt has stopped with the # of lenders releases 'cause it was too easy to back-track and calculate fall-out.

      <"these projections are NOT due to an anticipated continuation of the present refi market...in the 3Q of this year, refi's represented 77% of the revenue...in the 4Q it is projected to be 60%...in 1Q 03, it is projected to be 35% (a return to "normalcy" in the refi market conditions)">

      with all do respect, what do you expect them to say?

      forecast of volume and lt's make-up? i would suggest looking at mbaa.org and mbaa's purchase vs. refi forecast and add at least 20%-30% to determine lt's make-up, this has been true throughout lt's entire history... additionally it helps to understand the lending/real-estate market... VERY FEW realtors would ever suggest using an online LENDER much less a lead-selling company... realtors still control a huge percentage of purchase transactions, and when business is thin brokers/lenders become more competitive... with acquisition costs for 1 closed loan at lt being $1200 - $1700+, this could represent the ENTIRE profit that a local company is willing to do the transaction for, thus continuing to price lt brokers/lenders out of the market unless they bait and switch.

      onto post 3

      rc

      • 1 Reply to randomcombination
      • it is true that LT has yet to operate in a "normal market"...it certainly is a wait-and-see period for the company...

        for all intensive purposes, it appears that you and I agree on many points such as market share, scalability, etc...the only difference (and it is a big one) is your belief that the success of the company is vastly due to the market conditions and my belief that the market conditions accelerated the company's success, but is not the limiting factor...

        re: projections...I have agreed that looking out to 2007 is ridiculous...I also agree that a prediction concerning 60% rev next year and 35% the following may not be accurate...however, what I see is a company that has a plan for what it believes is a realistic scenario for the market environment and will be marching accordingly...if the conditions are more favorable, then that is pure gravy...if they are worse, then we might see a doom and gloom situation...however, I am not certain that you dispute their assumptions...I think you doubt the execution...

 
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