Key Points
This, despite a flip into the black under GAAP standards and double-digit revenue growth.
It seems the market has high standards for financial services companies these days.
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LendingTree (NASDAQ: TREE) stock was looking more like a tired sapling as the trading week came to a close. The company released its first earnings report for 2026, and investors were obviously concerned about several aspects within it. On a generally good Friday for U.S. equities, LendingTree's shares lost almost 22% of their value.
A mixed first quarter
LendingTree's consolidated revenue for its first quarter was just over $327 million, 37% higher year over year. On the bottom line under generally accepted accounting principles (GAAP), the financial services company flipped to a net income of $17.3 million ($1.22 per share) from the year-ago loss of $12.4 million.
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However, that profitability was well below the consensus analyst GAAP earnings-per-share (EPS) estimate of $1.47. On the other hand, the company beat the average pundit revenue projection of slightly under $316 million.
LendingTree has three reporting units. The largest, insurance, increased its take by 51% to just under $222 million, while its profit rose by 50% to almost $58 million.
This was followed by an 18% revenue increase (to a bit more than $66 million) for consumer, accompanied by a 21% rise in profit to $32.9 million. Finally, the home segment posted a 6% top-line improvement (to $39 million). However, home suffered a rather steep decline in profitability, which plummeted by 24% to $10 million.
Guidance got a boost
LendingTree raised its annual revenue and non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance.
For the former, it's now expecting $1.3 billion to $1.35 billion, up from the preceding forecast of nearly $1.28 billion to $1.33 billion. As for the latter, the new guidance is $152 million to $162 million. Prior to that, it stood at $150 million to $160 million.
Although there were some concerns in the first-quarter report, I don't think LendingTree deserved the investor drubbing it eventually took post-earnings. I feel its revenue growth across all three business units was telling, and I feel it still has plenty of potential for continued improvement.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
