It has been about a month since the last earnings report for Tree.com (TREE). Shares have lost about 10.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tree.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
LendingTree Q2 Earnings Miss on Higher Costs, 2026 View Lowered
LendingTree reported second-quarter 2026 adjusted net income per share of $1.27, which missed the Zacks Consensus Estimate of $1.46. The figure compares favorably with $1.13 reported in the prior-year quarter.
Results were affected by a decline in Consumer segment revenues and higher total costs. However, growth in revenues and adjusted EBITDA, along with strong Insurance segment performance, supported the results to some extent.
Results exclude certain non-recurring items. After considering these, TREE reported a GAAP net income of $9.6 million, or 68 cents per share, compared with $8.9 million, or 65 cents per share, in the year-ago quarter.
Revenues, Variable Marketing Margin Increase
Total revenues in the second quarter increased 25.3% year over year to $313.4 million. The reported figure missed the Zacks Consensus Estimate of $315.07 million by 0.5%.
Total cost of revenues was $11.3 million, up 12.4% from the prior-year quarter.
Total costs and expenses were $291.6 million, up 27.2% from the previous-year quarter.
Adjusted EBITDA totaled $35.2 million, up 10.6% from the year-ago quarter.
The variable marketing margin was $87.3 million, up 4.4%.
As of June 30, 2026, cash and cash equivalents were $110.8 million compared with $85.5 million as of March 31, 2026. Long-term debt was $386.4 million compared with $387 million as of March 31, 2026.
Segment Details
Home segment revenues increased 9% year over year to $43.9 million. Segment profit declined 14% year over year to $11.3 million.
Consumer segment revenues decreased 4% year over year to $60.3 million. Segment profit fell 14% year over year to $27.6 million.
Insurance segment revenues grew 42% year over year to $209.3 million. Segment profit increased 25% year over year to $50 million.
Outlook
Third-Quarter 2026
Total revenues are projected to be between $325 million and $335 million.
Adjusted EBITDA is anticipated to be between $34 million and $36 million.
The variable marketing margin is anticipated to be between $88 million and $93 million.
2026
Total revenues are expected to be between $1.30 billion and $1.32 billion compared with the prior range of $1.30 billion to $1.35 billion.
Adjusted EBITDA is projected to be in the range of $145-$152 million compared with the previous range of $152-$162 million.
The variable marketing margin is expected to be in the range of $364-$374 million compared with $378-$395 million previously.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Tree.com has a nice Growth Score of B, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Tree.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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LendingTree, Inc. (TREE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).