What Does The Future Hold For LendingTree, Inc. (NASDAQ:TREE)? These Analysts Have Been Cutting Their Estimates

One thing we could say about the analysts on LendingTree, Inc. (NASDAQ:TREE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the ten analysts covering LendingTree, is for revenues of US$841m in 2023, which would reflect a small 6.8% reduction in LendingTree's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$946m in 2023. It looks like forecasts have become a fair bit less optimistic on LendingTree, given the substantial drop in revenue estimates.

See our latest analysis for LendingTree

The consensus price target fell 7.1% to US$38.00, with the analysts clearly less optimistic about LendingTree's valuation following this update. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic LendingTree analyst has a price target of US$48.00 per share, while the most pessimistic values it at US$34.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await LendingTree shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 8.9% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 6.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LendingTree is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on LendingTree after today.

Still got questions? At least one of LendingTree's ten analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.