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Will LendingTree, Inc.'s (NASDAQ:TREE) Earnings Grow In The Year Ahead?

Simply Wall St

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In March 2019, LendingTree, Inc. (NASDAQ:TREE) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 1.2% in the upcoming year compared with the higher past 5-year average growth rate of 44%. Currently with trailing-twelve-month earnings of US$109m, we can expect this to reach US$111m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for LendingTree

Exciting times ahead?

The longer term view from the 13 analysts covering TREE is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of TREE's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqGS:TREE Past and Future Earnings, July 13th 2019

From the current net income level of US$109m and the final forecast of US$216m by 2022, the annual rate of growth for TREE’s earnings is 28%. EPS reaches $9.21 in the final year of forecast compared to the current $8.74 EPS today. Margins are currently sitting at 14%, which is expected to expand to 15% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For LendingTree, I've compiled three relevant factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is LendingTree worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether LendingTree is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of LendingTree? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.