LendingTree (TREE) versus Its Competitors Critical Analysis

LendingTree (NASDAQ:TREE) is one of 120 public companies in the “Consumer Finance” industry, but how does it compare to its peers? We will compare LendingTree to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Profitability

This table compares LendingTree and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LendingTree	7.60%	15.92%	5.40%
LendingTree Competitors	10.48%	-15.61%	2.01%

Valuation & Earnings

This table compares LendingTree and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
LendingTree	$1.12 billion	$151.31 million	5.03
LendingTree Competitors	$4.12 billion	$385.17 million	4.47

LendingTree’s peers have higher revenue and earnings than LendingTree. LendingTree is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

68.3% of LendingTree shares are owned by institutional investors. Comparatively, 45.7% of shares of all “Consumer Finance” companies are owned by institutional investors. 4.0% of LendingTree shares are owned by company insiders. Comparatively, 22.0% of shares of all “Consumer Finance” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

LendingTree has a beta of 1.99, suggesting that its stock price is 99% more volatile than the S&P 500. Comparatively, LendingTree’s peers have a beta of 1.26, suggesting that their average stock price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for LendingTree and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingTree	0	2	4	0	2.67
LendingTree Competitors	896	3364	5297	276	2.50

LendingTree currently has a consensus target price of $53.60, suggesting a potential upside of 51.80%. As a group, “Consumer Finance” companies have a potential upside of 22.31%. Given LendingTree’s stronger consensus rating and higher probable upside, equities research analysts plainly believe LendingTree is more favorable than its peers.

Summary

LendingTree beats its peers on 8 of the 13 factors compared.

About LendingTree

LendingTree, Inc. operates an online marketplace that connects consumers with financial institutions and other providers. Through its platform, users can compare offers and seek products such as mortgages, personal and auto loans, credit cards, insurance, and deposit accounts. Founded in 1996 by Doug Lebda, LendingTree helped bring loan comparison shopping online. The company serves consumers in the United States and also operates comparison and financial-information websites, including CompareCards and ValuePenguin.