TREE - LendingTree stock sinks after cutting year guidance

LendingTree ( NASDAQ: TREE ) stock is sliding 7.6% in Thursday morning trading after the lending platform said it sees "trough-level" earnings in Q4. The company is taking cost-cutting actions but also is increasing its spending on marketing as higher interest rates reduce demand for loans.

LendingTree ( TREE ) reduced its FY2022 revenue guidance to $985M-$1.02B from the $1.15B-$1.19B range it issued in May and lower than the $1.10B consensus. Full-year adjusted EBITDA is expected to be $75M-$85M, down from $140M-$150M previously.

Its annual guidance implies Q4 adjusted EBITDA of $15M-$20M in the absence of discretionary spending.

The company expects home and insurance segments to "soften modestly" in Q3 compared with the previous quarter, while the consumer segment continues to grow.

It reduced its headcount by almost 15% from its peak in mid-2021 and will ramp up marketing spending after cutting back on spending during the pandemic. That will weigh on its Q3 results. LendingTree ( TREE ) expects Q3 revenue of $235M-$245M vs. $283.6M consensus. Variable marketing margin for the quarter is expected to be $64M-$74M. Adjusted EBITDA of $2.8M-$8M is now expected.

"In what is becoming a very difficult and uncertain environment, we remain focused on maintaining the balance between near-term profitability and positioning the company for long-term success," the company said.

Earlier, LendingTree ( TREE ) Q2 non-GAAP EPS, revenue beats

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