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Investing.com -- Shares of LendingTree (NASDAQ:TREE) fell 25% following the company’s release of its first-quarter earnings, which fell short of Wall Street’s revenue expectations. The online financial services marketplace reported a first-quarter earnings per share (EPS) of $0.99, surpassing analyst estimates of $0.18. However, revenue for the quarter was $239.7 million, not meeting the consensus estimate of $247.74 million.
The company’s guidance for the second quarter of 2025 projects revenue between $241-248 million, compared to the consensus estimate of $248.5 million. For the full year of 2025, LendingTree anticipates revenue to be in the range of $0.955-0.995 billion, which is below the consensus estimate of $1.01 billion.
Despite the revenue shortfall, LendingTree reported year-over-year (YoY) revenue growth across all its business segments. The insurance segment saw a significant increase of 71% YoY, contributing to an overall revenue growth of 43% compared to the first quarter of the previous year. The company also highlighted a 14% YoY increase in adjusted EBITDA and a 47% rise in adjusted net income.
However, the earnings report was not without its concerns. LendingTree reported a GAAP net loss of $(12.4) million or $(0.92) per diluted share, which included a $15 million increase in litigation reserves related to a preliminary settlement agreement in the Mantha case.
Needham analyst Mayank Tandon provided commentary on the results, noting that "TREE’s 1Q results missed expectations on the top and bottom line, largely due to headwinds in the insurance vertical due to larger than normal seasonal headwinds and a partial quarter impact from the FCC (BME:FCC) regulation change, which has now been delayed." Tandon maintains a Buy rating on LendingTree but lowered the price target to $62 from $65, citing the diversified marketplace model as a positive but acknowledging the potential for near-term volatility due to macroeconomic concerns.
Investors appear to be reacting to the mixed financial results and cautious guidance, with concerns about the insurance vertical’s performance and the broader economic environment influencing the market’s response.
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