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Shares of LendingTree TREE declined 15.4% following the release of its fourth-quarter 2020 results. The company reported adjusted net income per share of 13 cents in the quarter, slumping 88% from the $1.12 reported in the prior-year quarter. The Zacks Consensus Estimate was pegged at a loss of 69 cents.
The company’s performance was adversely impacted by lower consumer revenues on the coronavirus crisis, partially offset by decreased expenses and a strong cash position. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reflect a decline from the prior-year quarter.
The company reported GAAP net loss of $8.1 million or 62 cents per share compared with the $1.5 million or 11 cents reported in the year-ago quarter.
For 2020, net loss (GAAP basis) was $48.2 million or $3.71 per share as against the net income of $17.8 million or $1.22 witnessed in 2019.
Revenues Decline, Expenses Fall
For 2020, total revenues were $909.9 million, down 17.8% year over year. The revenue figure comes in line with the Zacks Consensus Estimate.
Total revenues slid 13% year over year to $222.3 million in the final quarter of 2020. This downside primarily stemmed from lower consumer revenues. The reported figure, however, surpassed the Zacks Consensus Estimate of $221.3 million.
Total costs and expenses came in at $226.1 million, down 8% from the prior-year quarter. This decline chiefly resulted from a drop in cost of sales, selling and marketing expenses, amortization of intangibles and severance and litigation expenses.
Adjusted EBITDA totaled $26.3 million, significantly down 43% from the $45.9 million reported in the year-earlier quarter. Variable marketing margin came in at $82.3 million, down 12% year over year.
As of Dec 31, 2020, cash and cash equivalents were $169.9 million, up a whopping 182% from Dec 31, 2019. Long-term debt was down 51.5% from the prior-year end to $111.8 million. Total shareholders' equity was $364.7 million, down 9.3% from the Dec 31, 2019 level.
Concurrent with the December-end quarter results, management issued first-quarter 2021 estimates.
• Total revenues of $260-$270 million projected.
• Adjusted EBITDA anticipated in the $20-$25 million band.
• Variable Marketing Margin projected at $80-$85 million.
LendingTree put up a disappointing show during the October-December period in terms of earnings. The company’s inconsistent quarterly performance, unsustainable capital-deployment activities and reduction in consumer revenues are near-term headwinds. Nonetheless, the bank’s decreasing dependence on mortgage-related sources of revenues and strategic initiatives of acquisitions bode well for the long haul.
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
TCF Financial Corporation TCF reported fourth-quarter 2020 adjusted earnings per share of 75 cents, topping the Zacks Consensus Estimate. The figure, however, decreased 16.7% from the prior-year quarter.
BOK Financial BOKF delivered an earnings surprise of 11.1% in the fourth quarter. Earnings per share of $2.21outpaced the Zacks Consensus Estimate of $1.99. Further, the bottom line compared favorably with the prior-year quarter’s $1.56.
Texas Capital Bancshares Inc. TCBI recorded adjusted earnings per share of $1.14 in fourth-quarter 2020, inching past the Zacks Consensus Estimate of $1.13. Yet, results compared unfavorably with the year-ago quarter’s $1.23.
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