Tree.com (TREE) Surges 9.1%: Is This an Indication of Further Gains?

Tree.com (TREE) shares soared 9.1% in the last trading session to close at $39.07. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.9% loss over the past four weeks.

LendingTree’s impressive price surge was driven by improving investor sentiment as markets rallied broadly following the U.S.-Iran interim peace deal, which eased geopolitical risk and lifted financial stocks. Additionally, mortgage rates edged lower, providing a modest tailwind for origination volumes. Together, easing macro risks, lower mortgage rates, and renewed confidence in financial stocks helped boost investor confidence in TREE. 

This mortgage lending service provider is expected to post quarterly earnings of $1.46 per share in its upcoming report, which represents a year-over-year change of +29.2%. Revenues are expected to be $315.07 million, up 26% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Tree.com, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TREE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Tree.com is a member of the Zacks Financial - Mortgage & Related Services industry. One other stock in the same industry, Better Home & Finance Holding Company (BETR), finished the last trading session 4.6% higher at $28.43. BETR has returned 11.7% over the past month.

Better Home & Finance Holding Company's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$1.15. Compared to the company's year-ago EPS, this represents a change of +42.2%. Better Home & Finance Holding Company currently boasts a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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