LendingTree (TREE) Stock Rises 19.5% on Q3 Earnings Beat
LendingTree, Inc. TREE shares have rallied 19.5% in response to better-than-expected third-quarter 2023 results. Adjusted net income per share of 61 cents beat the Zacks Consensus Estimate of 39 cents. The reported figure compares favorably with an adjusted net loss of 36 cents reported in the prior-year quarter.
The company’s results were aided by lower costs, while a decline in revenues was a spoilsport. Management reduced the guidance for 2023.
LendingTree reported a net loss of $148.5 million compared with a loss of $158.7 million in the year-ago quarter.
Revenues & Variable Marketing Margin Decline
Total revenues were down 34.7% year over year to $155.2 million in the third quarter. The downside stemmed from a decline in the Home, Consumer and Insurance segments' revenues. Also, the reported figure missed the Zacks Consensus Estimate of $161.6 million.
The total cost of revenues was $7.6 million, down 46.3% from the prior-year quarter.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $21.8 million, up significantly year over year. The variable marketing margin was at $67.7 million, down 9.4%.
As of Sep 30, 2023, cash and cash equivalents were $175.6 million compared with $298.8 million as of 2022 end. Long-term debt was $625.7 million compared with $813.5 million as of 2022 end.
Outlook
For the fourth quarter of 2023, total revenues are estimated between $132 million and $142 million. Adjusted EBITDA and the variable marketing margin are anticipated to be $11-$17 million and $55-$65 million, respectively.
For 2023, total revenues are estimated between $670 million and $680 million. Adjusted EBITDA is anticipated to be $74-$80 million. The variable marketing margin is expected to be between $275 million and $285 million.
Conclusion
The company’s total revenues were affected mainly by the decline in Home, Consumer and Insurance segment revenues. Nonetheless, TREE has been focused on expense management. It also ensures maintaining the balance between its near-term profitability and aligning the same for long-term success.
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
Evercore EVR reported quarterly adjusted earnings per share of $1.30, missing the Zacks Consensus Estimate of $1.31 by a penny. Also, the bottom line declined from the prior-year quarter’s $2.20.
A decline in net revenues of the Investment Banking & Equities segment hampered the overall top line. Amid a challenging environment, the company saw a decrease in assets under management. However, the rise in Investment Management segment revenues offered some support.
Sallie Mae SLM, formally known as SLM Corporation, reported third-quarter 2023 earnings per share of 11 cents, missing the Zacks Consensus Estimate of 33 cents. The bottom line compared unfavorably with the prior-year quarter’s earnings of 29 cents.
A rise in non-interest expenses and lower non-interest income impeded the results. Nonetheless, lower provisions for credit losses, an increase in the net interest income and robust loan originations were positives.
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