LendingTree, Inc. TREE shares have gained 9.9% in the past year, outperforming the industry’s rise of 7.9%. In the same time frame, the S&P 500 index has risen 6.8%. Meanwhile, TREE’s peers Velocity Financial VEL and Onity Group ONIT have risen 5.4% and 20%, respectively.
Price Performance
Zacks Investment Research
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In a time where digital transformation is resaping the financial services landscape, LendingTree has evolved as a company of resilience and reinvention. Over the years, the company has progressed into a diversified online marketplace for a broad range of financial products, from credit cards to insurance.
But is the LendingTree stock worth a spot in your portfolio now? Let us delve deeper and analyze the factors at play to decipher its investment worthiness.
LendingTree’s Revenue Diversification Efforts
One of TREE's smartest moves is its shift from overreliance on mortgage lending — a sector prone to cyclical slumps.
LendingTree is committed to boosting revenues by diversifying its non-mortgage product offerings, particularly in the Consumer segment. Over the past years, the company has amplified its services, such as credit cards, and widened loan offerings to personal, auto, small business, and student loans. With the launch of the LendingTree WinCard in partnership and an Upgrade in February 2023, the company provided its first branded consumer credit offering. LendingTree’s initiatives, including SPRING (previously MyLendingTree) and TreeQual, are likely to improve cross-selling opportunities.
The company intends to continue adding offerings for consumers, small businesses and network partners to its online marketplace to grow and diversify its revenue sources. This diversification has led to seeing a compound annual growth rate of 3.3% in non-mortgage revenue streams over the past three years.
These efforts by TREE are not just smart — they are essential. As mortgage rates fluctuate, having multiple revenue drivers allows it to sustain profitability in volatile markets.
TREE’s Inorganic Efforts & Expense Management
LendingTree has been benefiting from an acquisition spree. Over the years, the company has completed several deals formore than $1 billion, including potential earnouts. TREE enhanced its credit services and credit card product offerings, as well as strengthened its online lending platform through acquisitions.
LendingTree is leveraging data and technology to augment user experience and monetization. The company’s investment in EarnUp (in early 2022), a consumer-facing payments platform, demonstrates its commitment to building a more comprehensive, tech-enabled ecosystem for financial health management.
TREE’s cost-containment efforts include headcount reductions and the elimination of less profitable businesses. In sync with this, the company is emphasizing the reduction of variable marketing margin, which reflects the efficiency of marketing expenditure. In 2024, the variable marketing margin was 33.8% of revenues compared with 41.7% in 2023.
These initiatives by TREE will likely support bottom-line growth in the upcoming period.
LendingTree’s Strong Earnings Growth & Momentum
TREE's recent financial performance paints a picture of a company on the rebound. In the fourth quarter of 2024, it posted adjusted earnings per share (EPS) of $1.16, significantly higher than 28 cents in the year-ago period. The company registered remarkable revenue growth in the fourth quarter, especially in the Insurance segment (skyrocketing 188% on a year-over-year basis), which contributed to a surge in adjusted net income, translating to a significant rise in EPS.
LendingTree has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimates in three of the trailing four quarters and missed once. Though the company’s earnings have witnessed a volatile trend over the past five years, the same has exhibited strong growth compared with the industry’s average
EPS F12M
Zacks Investment Research
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For 2025 and 2026, the company’s earnings are expected to grow 20.7% and 23.6% year over year, respectively.
Earnings Estimates
Zacks Investment Research
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Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
LendingTree’s earnings are expected to rise by 20.7% over the next 3-5 years, higher than its peers VEN and ONIT. Velocity Financial earnings are expected to rise by 7.9%, while Onity Group’s earnings are projected to decline by 13.1%.
Does LendingTree Deserves a Spot in Your Portfolio Now?
Despite the Federal Reserve’s monetary policy easing, mortgage rates did not decline significantly. The mortgage rates are still hovering near 6.5%. Hence, LendingTree is likely to witness lower mortgage originations, which may affect its performance to some extent.
Nonetheless, TREE’s evolution from a mortgage-led business to a diversified financial company is expected to pay off. With strong earnings momentum, inorganic expansion and a diversified product portfolio, the company is well-positioned for sustainable growth.
Given favorable factors, LendingTree’s sales are expected to grow year over year in 2025 and 2026.
Sales Estimates
Zacks Investment Research
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From a valuation point of view, TREE appears inexpensive relative to the industry. The company is currently trading at a discount with a forward 12-month price-to-earnings (P/E) F12M multiple of 10.89X, lower than the industry average of 19.19X. LendingTree’s peers Velocity Financial and Onity Group are trading at a forward 12-month price-to-earnings of 7.80X and 2.91X, respectively.
Price-to-Earnings F12M
Zacks Investment Research
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Hence, given strong fundamentals and favorable valuations, TREE is a buy-worthy stock for growth-focused investors.
Lending Tree currently sports a Zacks Rank 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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