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LendingTree (TREE) Gains 4.4% Despite Q2 Earnings Miss Estimates
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LendingTree, Inc.’s (TREE - Free Report) second-quarter 2024 adjusted net income per share of 54 cents missed the Zacks Consensus Estimate of 73 cents. The reported figure compares unfavorably with $1.14 reported in the prior-year quarter.
The results were affected by a lower liquidity level and a decline in earnings before interest, taxes, depreciation and amortization (EBITDA). However, a rise in revenues, along with lower costs, acted as tailwinds. Probably driven by these positive aspects, shares of the company gained 4.4% following the earnings release.
The results exclude certain non-recurring items. After considering these, TREE reported GAAP net income of $7.8 million against a loss of $0.1 million in the year-ago quarter's level.
Total revenues were up 15.1% year over year to $210.1 million. The rise stemmed from a substantial increase in the Insurance segments' revenues. Also, the reported figure surpassed the Zacks Consensus Estimate of $194.1 million.
The total cost of revenues was $8.4 million, down 9.6% from the prior-year quarter's level.
Adjusted EBITDA totaled $23.5 million, down 11.8% year over year. The variable marketing margin was $70.9 million, down 7.3% year over year.
As of Jun 30, 2024, the cash and cash equivalents were $66.8 million compared with $1.12 billion as of Dec 31, 2023. Long-term debt was $467.7 million compared with $525.6 million as of Dec 31, 2023.
Outlook
For the third quarter of 2024, total revenues are estimated between $230 million and $260 million. Adjusted EBITDA and the variable marketing margin are anticipated between $23-$27 million and $73-$80 million, respectively.
For 2024, total revenues are projected between $830 million and $870 million. Adjusted EBITDA is projected in the $85-$95 million band. The variable marketing margin is expected in the range of $280-$300 million.
Conclusion
TREE’s inorganic growth moves have strengthened its online lending platform. Its second-quarter results were mainly affected by an EBITDA. The company’s efforts to boost revenues by diversifying its non-mortgage product offerings will support top-line growth in the future.
LendingTree, Inc. Price, Consensus and EPS Surprise
Sallie Mae (SLM - Free Report) , formally SLM Corporation, reported second-quarter 2024 earnings per share of $1.11, which surpassed the Zacks Consensus Estimate of 79 cents. The bottom line compared favorably with the prior-year quarter’s $1.10 per share.
Lower provisions for credit losses and robust loan originations were positives. However, a decline in SLM’s NII and a rise in non-interest expenses impeded results.
Navient Corporation (NAVI - Free Report) reported second-quarter 2024 adjusted earnings per share (excluding restructuring and regulatory-related expenses and Federal Family Education Loan Program [FFELP] and write-off related to loan premium) of 53 cents, surpassing the Zacks Consensus Estimate of 42 cents. It reported 52 cents in the prior-year quarter.
NAVI’s results were driven by a decline in total expenses. A solid liquidity position was another positive. However, a decrease in NII and other income were headwinds.
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LendingTree (TREE) Gains 4.4% Despite Q2 Earnings Miss Estimates
LendingTree, Inc.’s (TREE - Free Report) second-quarter 2024 adjusted net income per share of 54 cents missed the Zacks Consensus Estimate of 73 cents. The reported figure compares unfavorably with $1.14 reported in the prior-year quarter.
The results were affected by a lower liquidity level and a decline in earnings before interest, taxes, depreciation and amortization (EBITDA). However, a rise in revenues, along with lower costs, acted as tailwinds. Probably driven by these positive aspects, shares of the company gained 4.4% following the earnings release.
The results exclude certain non-recurring items. After considering these, TREE reported GAAP net income of $7.8 million against a loss of $0.1 million in the year-ago quarter's level.
Revenues Increase, Variable Marketing Margin Declines
Total revenues were up 15.1% year over year to $210.1 million. The rise stemmed from a substantial increase in the Insurance segments' revenues. Also, the reported figure surpassed the Zacks Consensus Estimate of $194.1 million.
The total cost of revenues was $8.4 million, down 9.6% from the prior-year quarter's level.
Adjusted EBITDA totaled $23.5 million, down 11.8% year over year. The variable marketing margin was $70.9 million, down 7.3% year over year.
As of Jun 30, 2024, the cash and cash equivalents were $66.8 million compared with $1.12 billion as of Dec 31, 2023. Long-term debt was $467.7 million compared with $525.6 million as of Dec 31, 2023.
Outlook
For the third quarter of 2024, total revenues are estimated between $230 million and $260 million. Adjusted EBITDA and the variable marketing margin are anticipated between $23-$27 million and $73-$80 million, respectively.
For 2024, total revenues are projected between $830 million and $870 million. Adjusted EBITDA is projected in the $85-$95 million band. The variable marketing margin is expected in the range of $280-$300 million.
Conclusion
TREE’s inorganic growth moves have strengthened its online lending platform. Its second-quarter results were mainly affected by an EBITDA. The company’s efforts to boost revenues by diversifying its non-mortgage product offerings will support top-line growth in the future.
LendingTree, Inc. Price, Consensus and EPS Surprise
LendingTree, Inc. price-consensus-eps-surprise-chart | LendingTree, Inc. Quote
Currently, LendingTree carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Sallie Mae (SLM - Free Report) , formally SLM Corporation, reported second-quarter 2024 earnings per share of $1.11, which surpassed the Zacks Consensus Estimate of 79 cents. The bottom line compared favorably with the prior-year quarter’s $1.10 per share.
Lower provisions for credit losses and robust loan originations were positives. However, a decline in SLM’s NII and a rise in non-interest expenses impeded results.
Navient Corporation (NAVI - Free Report) reported second-quarter 2024 adjusted earnings per share (excluding restructuring and regulatory-related expenses and Federal Family Education Loan Program [FFELP] and write-off related to loan premium) of 53 cents, surpassing the Zacks Consensus Estimate of 42 cents. It reported 52 cents in the prior-year quarter.
NAVI’s results were driven by a decline in total expenses. A solid liquidity position was another positive. However, a decrease in NII and other income were headwinds.