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In a challenging economic climate, Tree.com Inc. (NASDAQ:TREE), a $479 million market cap company, has experienced a notable downturn, with its shares plummeting to $34.01, near its 52-week low of $34.3. This latest price level reflects a significant retreat from the company’s more robust performance in the past year, despite impressive revenue growth of 52%. Investors are closely monitoring Tree.com’s financial health and market position, as the stock’s downward trend raises concerns about the company’s near-term prospects amidst a volatile market environment. According to InvestingPro analysis, the stock appears undervalued at current levels. The 52-week low serves as a critical indicator for shareholders and potential investors, signaling a period of heightened scrutiny and strategic reassessment for the online lending exchange provider. InvestingPro data reveals that 4 analysts have revised their earnings upwards for the upcoming period, with 8 additional ProTips available to subscribers.
In other recent news, LendingTree announced its first-quarter 2025 earnings, revealing a notable earnings per share (EPS) of $0.99, significantly exceeding the analyst forecast of $0.18. However, the company’s revenue for the quarter was $239.7 million, falling short of the expected $247.74 million. LendingTree also provided guidance for the second quarter, projecting revenue between $241-248 million, which remains below the consensus estimate of $248.5 million. For the full year, the company anticipates revenue in the range of $0.955-0.995 billion, again below the consensus estimate of $1.01 billion.
Despite the revenue miss, LendingTree reported year-over-year growth across all its business segments, with the insurance segment seeing a 71% increase. The company also noted a 14% rise in adjusted EBITDA and a 47% increase in adjusted net income. However, LendingTree faced a GAAP net loss of $(12.4) million, partly due to a $15 million increase in litigation reserves related to a settlement agreement. Analyst firm Needham maintained a Buy rating on LendingTree but reduced the price target from $65 to $62, citing challenges in the insurance vertical and broader economic concerns.
Needham analysts highlighted the company’s diversified marketplace model and strong performance in home and consumer segments as positive factors. They noted that while there might be near-term volatility, the risk-reward profile of LendingTree’s stock remains favorable. LendingTree’s management expressed optimism about future performance, forecasting strong adjusted EBITDA growth and improvements in the insurance segment for the latter half of 2025.
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