LendingTree (TREE) Stock Up 5.7% Despite Q1 Earnings Miss
Zacks Investment Research | Apr 28, 2019 09:23PM ET
LendingTree (NASDAQ:TREE) reported a negative earnings surprise of 12.7% in first-quarter 2019. Adjusted net income per share of $1.10 lagged the Zacks Consensus Estimate of $1.26. However, the figure comes in line with the prior-year quarter's reported tally.
The company’s results reflected rise in expenses. However, higher revenues, with major contribution from non-mortgage products revenues, were a tailwind. Also, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) displayed impressive growth. All these positives raised investors’ optimism leading to 5.78% rise in shares of LendingTree, following the release.
The company reported GAAP net income of $0.6 million or 4 cents per share compared with $35.9 million or $2.41 in the year-ago quarter.
Revenue Growth Partially Offset by Higher Expenses
Total revenues soared 45% year over year to $262.4 million in the first quarter. This upside primarily stemmed from higher non-mortgage product revenues, partly mitigated by lower mortgage revenues. Further, the reported figure outpaced the Zacks Consensus Estimate of $239 million.
Total costs and expenses came in at $264.2 million, flaring up 59.4% from the prior-year quarter. This upswing primarily resulted from rise in almost all components of cost.
Adjusted EBITDA totaled $43 million, up 36% from $31.7 million reported in the prior-year quarter.
As of Mar 31, 2019, cash and cash equivalents were $65 million, down nearly 38.5% from Dec 31, 2018. Long-term debt inched up 1.3% from the prior-year end to $254.2 million. Total shareholders' equity was $352.2 million, up 1.7% from the Dec 31, 2018 level.
Outlook
Concurrent with the first-quarter results, management provided second-quarter 2019 guidance, as well as revised its full-year 2019 estimates.
Second-Quarter 2019
- Total revenues projected at $260-$270 million.
- Adjusted EBITDA estimated in the $45-$47 million band.
- Variable Marketing Margin is projected at $92-$97 million.
Full-Year 2019
- Total revenues of $1,060-$1,090 million predicted, up from the previous projection of $1,010-$1,045 million.
- Adjusted EBITDA anticipated in the $210-$220 million band, up from the prior forecast of $205-$215 million.
- Variable Marketing Margin is projected at $400-$415 million, up from the prior estimate of $385-$400 million.
Conclusion
LendingTree put up a decent performance during the January-March period as compared to the prior-year period. The company’s expansion strategy for its non-mortgage business seems to be working well, mirrored by the continued rise in non mortgage revenues. Also, LendingTree’s commitment to diversify product offerings beyond mortgage-related products augurs well for the long term.
Get The News You Want
Nevertheless, escalating expenses remain a concern.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.