Lendingtree Stock Story


USD 43.01  2.81  6.13%   

Lendingtree is scheduled to announce its earnings today. Although many aggressive traders are getting into financial services space, Lendingtree may or may not be your first choice. We will discuss if it could be a much better year for Lendingtree shareholders. Here we also measure the ability of Lendingtree to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over three months ago
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Chances of Lendingtree (NASDAQ:TREE) to dip in June

This firm currently holds 748.92 M in liabilities with Debt to Equity (D/E) ratio of 1.67, which is about average as compared to similar companies. The company has a current ratio of 1.33, which is within standard range for the sector. Debt can assist Lendingtree until it has trouble settling it off, either with new capital or with free cash flow. So, Lendingtree's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Lendingtree sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Lendingtree to invest in growth at high rates of return. When we think about Lendingtree's use of debt, we should always consider it together with cash and equity.
Lendingtree financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Lendingtree, including all of Lendingtree's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Lendingtree assets, the company is considered highly leveraged. Understanding the composition and structure of overall Lendingtree debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Lendingtree Total Liabilities

Lendingtree liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Lendingtree has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Lendingtree balance sheet include debt obligations and money owed to different Lendingtree vendors, workers, and loan providers. Below is the chart of Lendingtree short long-term liabilities accounts currently reported on its balance sheet.
You can use Lendingtree financial leverage analysis tool to get a better grip on understanding its financial position

How important is Lendingtree's Liquidity

Lendingtree financial leverage refers to using borrowed capital as a funding source to finance Lendingtree ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Lendingtree financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Lendingtree's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Lendingtree, but it might be worth checking our own buy vs. sell analysis

What is driving Lendingtree Investor Appetite?

The big decline in price over the last few months for Lendingtree created some momentum for shareholders as it was traded today as low as 71.49 and as high as 84.5 per share. The company executives failed to add value to investors and position the firm supply of money to exploit market volatility in April. However, diversifying your holdings with Lendingtree or similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 4.52. This high volatility is attributed to the latest market swings and not-so-good earnings reports for some of the Lendingtree partners.

Lendingtree implied volatility may change after the surge

Lendingtree latest skewness ascents over 0.64. Lendingtree exhibits very low volatility with skewness of 0.64 and kurtosis of 1.36. However, we advise investors to further study Lendingtree technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Lendingtree's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Lendingtree's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Lendingtree Implied Volatility

Lendingtree's implied volatility exposes the market's sentiment of Lendingtree stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Lendingtree's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Lendingtree stock will not fluctuate a lot when Lendingtree's options are near their expiration.

The Bottom Line

Although many other companies within the financial conglomerates industry are still a little expensive, even after the recent corrections, Lendingtree may offer a potential longer-term growth to shareholders. To summarize, as of the 5th of May 2022, our ongoing 90 days advice on the firm is Hold. We believe Lendingtree is currently undervalued with below average chance of distress for the next two years.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Lendingtree. Please refer to our Terms of Use for any information regarding our disclosure principles.

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