TREE - LendingTree stock tanks after cutting year guidance

2023-07-27 15:39:16 ET

LendingTree ( NASDAQ: TREE ) stock sank 25.7% in Thursday mid-afternoon trading -- its worst intraday decline since May -- after the online lending marketplace reduced its full-year guidance for revenue and adjusted EBITDA as macroeconomic headwinds weigh on most of its product set.

Customer demand for new loans and insurance keep outpacing the appetite for new customers at LendingTree's ( TREE ) partner, Chairman and CEO Doug Lebda pointed out.

"We believe this imbalance will prove temporary, and are encouraged by signals the Fed is nearing the end of its tightening campaign as the pace of inflation has slowed considerably," he added.

For 2023, the company now expects revenue of $680M-$700M, vs. $768M average analyst estimate, down from $760M-$800M in the prior guidance range.

It sees adjusted EBITDA of $70M-$80M, vs. $80M-$90M in the previous target.

Q2 adjusted EPS of $1.14 , breezing past the $0.60 consensus, jumped from $0.25 in Q1 and from $0.58 in the year-earlier period. Revenue of $182.5M, trailing the $195.7M consensus, dipped from $200.5M in the prior quarter and from $261.9M in Q2 of last year.

Variable marketing margin came in at $76.5M, up slightly from $76.1M in Q1 and down 16% Y/Y. As a percentage of revenue, variable marketing margin was 42% vs. 38% in Q1 and 35% in Q2 2022.

Adjusted EBITDA of $26.7M accelerated from $14.5M in Q1 and slipped from $28.6M a year ago.

Profit by segment:

• Home: $13.3M -- down 11.9% Q/Q and 50.2% Y/Y.
• Consumer: $40.7M -- up 16.6% Q/Q and down 8.7% Y/Y.
• Insurance: $24.8M -- down 17.9% Q/Q and up 9.7% Y/Y.

More on LendingTree:

• SA's Quant system rates TREE a Hold
• LendingTree: May Be Undervalued
• LendingTree: Buy The Dip As Negative Events Priced In (Rating Upgrade)

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