On Wednesday, JPMorgan updated its outlook on Lending Tree (NASDAQ:TREE), a leading online lending marketplace, raising the stock's price target to $53.00 from $38.00. The firm has maintained an Overweight rating on the shares.
The adjustment followed Lending Tree's first-quarter results, which saw the company's adjusted EBITDA surpass forecasts, with revenue hitting the higher end of the guidance range. The positive performance on Tuesday led to a significant 29% increase in TREE shares, contrasting with a 2% decline in the S&P Midcap Index.
In response to the robust quarterly performance, TREE has revised its full-year 2024 revenue expectations to a range of $690 million to $720 million, approximately 5% higher than the consensus estimates before the earnings report. The company will continue to follow its previous guidance for Value of Mortgage Marketing (VMM) and adjusted EBITDA.
Management expressed a notably more optimistic outlook for revenue and adjusted EBITDA, suggesting confidence in the company's trajectory beyond just the Insurance segment. This optimism is supported by sequential revenue growth across all segments, which is anticipated to extend into the second quarter.
The revised price target of $53 implies a 15% annualized potential total return for Lending Tree's stock, as JPMorgan reaffirms its Overweight stance.
InvestingPro Insights
Following JPMorgan's updated outlook on Lending Tree, current data from InvestingPro provides additional context to the company’s financial health and market performance. With a market capitalization of approximately $629.58 million and a notable gross profit margin of 94.24% over the last twelve months as of Q4 2023, Lending Tree demonstrates a strong ability to generate revenue relative to its costs. Despite a revenue decline of over 31% during the same period, the company has experienced a significant uptick in stock price, with a 28.75% return over the last week and an impressive 106.55% return over the last year.
InvestingPro Tips highlight that Lending Tree is expected to become profitable this year, as analysts predict a turnaround from the unprofitability of the last twelve months. Additionally, the company’s liquid assets surpass short-term obligations, indicating a solid financial position to meet its immediate liabilities. It's worth noting that while the stock trades with high price volatility, it has been trading near its 52-week high.
For readers interested in a deeper analysis, there are over 13 additional InvestingPro Tips available for Lending Tree, which can be accessed at InvestingPro. To get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24.
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