LendingTree: Insider Buying Can't Sell Me On This Business Model

2025-06-03 11:27:35 ET

Summary

• LendingTree has underperformed with an 85% stock decline over 5 years and weak growth metrics.
• Revenue and net income have been choppy, while cash flow has only trickled in.
• The business model lends itself to competition, and LendingTree faces the challenge of differentiating itself from competitors.
• Despite significant insider ownership and recent share repurchases, I am bearish on TREE's prospects.

Introduction

Last week, I covered Enova International ( ENVA ), an online subprime lender that gives loans to consumers and small businesses. The company had posted rapid top and bottom-line growth over the past 5 years, and the stock had been promptly rewarded. At a glance, LendingTree ( TREE ) seemed to be the opposite, posting middling to poor growth and seeing its stock tank 85% over the past 5 years. However, for investors like me who focus on a management's ownership stake as well as insider buying, LendingTree checked a lot of positive boxes....

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