Shares of Lending Tree (NYSE: TREE) are shining since the start of this year, driven by higher than expected growth in revenues. The P2P lending platform’s strategy of diversifying its product portfolio helped in strengthening the revenue base.
Lending Tree is engaged in operating an online loan marketplace and offers consumers direct access to a broad range of lenders.
The company topped first-quarter revenue estimates along with boosting its outlook for the full year. Its first-quarter revenue of $262.4M grew 45% Y/Y, up 29% Q/Q. The first quarter revenue has topped the average analyst estimate of $239.7 million. In addition, the company now expects 2019 revenue of $1.06B-$1.09B compared to the prior forecast of $1.01B-$1.05B and the consensus estimate of $1.03B.
Commenting on results its CEO said, “Tremendous growth in insurance, along with a re-acceleration in credit card growth and stabilizing mortgage business, are enabling us to execute on key strategic initiatives to drive long term benefit for the Company and for shareholders.”
Along with connecting borrowers with lenders, the company’s strategy of moving towards insurance business is offering huge support to financial numbers and share price.
Its share price rose more than 68% since the start of this year, extending the three-year gains to 350%. Its shares are currently trading close to an all-time high of $400. Analysts, on the other hand, expects its shares to extend the upside momentum amid lower interest rate and increasing financial numbers.
“Lending Tree remains one of my favorites,” the “Mad Money” host Jim Cramer said. “There were some people shorting the stock. They got completely run over. They became roadkill. Good for Doug.”
The company appears in a solid cash position to support its business growth. It has generated operating cash flows of $23 million in the latest quarter, which is more than enough to cover its capital needs of only $5 million. It has also repaid $60 million of debt in the latest quarter.
