LendingTree Is A Potential Value Trap

Nov. 21, 2022 7:13 AM ETLendingTree, Inc. (TREE)
Ted Littlefield profile picture
Ted Littlefield
196 Followers

Summary

  • LendingTree and its peers have experienced an awful 2022, with LendingTree down more than 80% in the year-to-date.
  • Despite that, the company has had fairly strong financial performance over the last five years.
  • However, the lending marketplace has not resulted in a winner-takes-all market, and LendingTree is faced with numerous competitors.
  • In addition, the company faces a challenging future, with interest rate hikes depressing demand.
  • Despite being relatively cheap given a negative P/E multiple, and an FCF yield above 9%, the company has no perceivable triggers for near-term mean reversion.

Lendingtree building.

Julio Tamayo

Online lending marketplace, LendingTree (NASDAQ:TREE), has been beaten and battered in 2022, experiencing a more than 80% plunge. While this may lead investors to believe that there is value there, and certainly, the company's financial performance does not suggest a company on

Source: Google Finance

Source: Google Finance

Source: Google Finance

Source: Google Finance

Source: Credit Suisse

Source: Credit Suisse

Source: LendingTree 2021 Annual Report

Source: LendingTree 2021 Annual Report

Source: Q3 Letter to the Shareholders

Source: Q3 Letter to the Shareholders

Source: Credit Suisse

Source: Credit Suisse

Source: Credit Suisse

Source: Credit Suisse

Source: Credit Suisse

Source: Credit Suisse

Source: LendingTree Annual Reports and Own Calculations

Source: LendingTree Annual Reports and Own Calculations

Source: LendingTree Annual Reports and Own Calculations

Source: LendingTree Annual Reports and Own Calculations

Source: LendingTree Q4 Investor Presentation

Source: LendingTree Q4 Investor Presentation

This article was written by

Ted Littlefield profile picture
196 Followers
Entrepreneur, private investor with a diverse portfolio in commodities, stocks and crypto. Not a financial advisor, all my opinions are just my thoughts following decades of investing. I have colloborated with Seeking Alpha contributor Gavin Barwell in the past, but we are both independent writers who do not comment on each other's articles nor cover the same stocks/companies.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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