TREE - LendingTree stock plummets after year revenue guide takes hit

2023-05-02 08:41:33 ET

LendingTree ( NASDAQ: TREE ) stock plunged 21.5% in Tuesday premarket trading after the online lending marketplace reduced its revenue guidance for the full year in light of a tough macroeconomic backdrop.

The company said its cost-cutting efforts were completed during the first quarter. "The series of steps we have taken to right-size our fixed costs over the last two quarters will allow us to generate improved operating leverage as demand from our partners eventually recovers," said Chairman and CEO Doug Lebda.

For 2023, TREE now expects revenue of $760M-$800M, trailing the $945.6M consensus (10 estimates), compared with the prior range of $935M-$985M. It also sees 2023 variable marketing margin of $290M-$310M, vs. Visible Alpha consensus of $343M, down from $325M-$350M in the prior view. And adjusted EBITDA for the year is now expected to be $80M-$90M, compared with $85M-$95M in the previous range.

Looking to the second quarter, revenue is targeted to be $190M-$200M compared with the average analyst estimate of $244.3M (10 estimates). It expects Q2 variable marketing margin of $75M-$80M vs. Visible Alpha consensus of $87.6M. Adjusted EBITDA for Q2 is expected to be $17M-$22M.

Q1 adjusted EPS of $0.25, exceeding the -$0.11 consensus, slid from $0.38 in the prior quarter and from $0.46 a year before.

Revenue of $200.5M, falling short of the $207.0M consensus, slipped from $202.1M in Q4 2022 and from $283.2M in the three months ended March 31, 2022.

Variable marketing margin came in at $76.1M, down from $78.1M in Q4 2022 and from $94.1M in the year-earlier quarter. As a percentage of revenue, variable marketing margin was 38% vs. 39% in Q4 2022 and 33% in Q1 2022.

Adjusted EBITDA fell to $14.5M from $16.7M in the previous quarter and from $29.4M a year ago.

Profit by segment:

• Home: $15.1M -- down 7% Q/Q and 58% Y/Y.
• Consumer: $34.9M -- down 16% Q/Q and 18% Y/Y.
• Insurance: $30.2M -- up 18% Q/Q and 43% Y/Y.

Conference call at 9:00 a.m. ET.

More on LendingTree

• LendingTree Non-GAAP EPS of $0.25 beats by $0.36, revenue of $200.5M misses by $6.53M.
• LendingTree announces 13% workforce reduction plan to reduce operating costs
• LendingTree: Economic Risks Persist

For further details see: