LendingTree, Inc. (NASDAQ:TREE), a leading online loan marketplace, has entered into a Sales Agreement with BofA Securities, Inc. and Citigroup Global Markets Inc. to sell up to $50 million of common stock, the company disclosed today. The agreement allows for the sale of shares at the market prices prevailing at the time of each sale.
The shares will be offered through an "at the market" equity offering, which permits sales to be made directly on The Nasdaq Stock Market or any other existing trading market for the company’s stock. The Managers will execute sales based on the company's instructions and may receive a commission of up to 3.0% of the gross proceeds from each sale.
LendingTree is not required to sell any specific number of shares but has the flexibility to direct the Managers to sell shares from time to time, with the offering set to continue until the Sales Agreement is terminated by either party.
The proceeds from this offering are expected to provide additional capital that may be used for general corporate purposes. The offering will be conducted under LendingTree's previously filed and SEC effective Registration Statement on Form S-3 and related prospectus.
The Sales Agreement provides for customary indemnification and contribution provisions between LendingTree and the Managers. Additionally, LendingTree will reimburse the Managers for certain expenses related to the Sales Agreement.
In other recent news, LendingTree has reported robust growth in its revenue, particularly in the insurance sector which more than doubled year-over-year in the second quarter of 2024. This growth has been attributed to high insurance carrier demand and strong home demand, leading to a rise in insurance revenue. Furthermore, the company's revenue guidance has been raised by 21% due to the promising growth in personal loans and the expected continuation of the insurance revenue growth trajectory into 2025.
Recent developments also include analyst upgrades from Oppenheimer, Stephens, and Needham. Oppenheimer increased its price target for LendingTree to $65, maintaining an Outperform rating, citing an accelerating insurance cycle and expected revenue growth. Similarly, Stephens raised its price target to $65, maintaining an Overweight rating, and highlighted a 'growth turnaround'. Needham also raised its price target to $67, maintaining a Buy rating, and attributed the growth to a rise in insurance revenue.
In addition to these upgrades, LendingTree has also welcomed Jason Bengel as the new CFO, succeeding Trent Ziegler. Despite a recent data breach at its subsidiary QuoteWizard, LendingTree reassures stakeholders of minimal impact on its operations. The company maintains a strategic focus on generating positive incremental variable margin dollars and capturing high-intent consumers, aiming to replicate its success in the insurance sector within the lending space.
InvestingPro Insights
As LendingTree, Inc. (NASDAQ:TREE) engages in its "at the market" equity offering, potential investors may consider several key metrics and insights from InvestingPro. With a current market capitalization of around $709.53 million, the company's financials reflect a challenging landscape. The P/E ratio stands at -5.65, indicating that investors are currently shouldering losses. However, the company's gross profit margin remains high at 95.11%, suggesting efficient cost management relative to revenue.
InvestingPro Tips highlight that while LendingTree has not been profitable over the last twelve months, analysts are predicting a turnaround with net income expected to grow this year. The stock's price has experienced significant volatility, with a remarkable 115.57% return over the past year, and a substantial 26.47% increase in the last month alone. Despite this, some caution may be warranted, as 4 analysts have revised their earnings forecasts downwards for the upcoming period.
For investors seeking more in-depth analysis, InvestingPro offers additional tips on LendingTree, providing a comprehensive view of the company's financial health and market prospects. As of now, there are 12 more InvestingPro Tips available for those interested in LendingTree's potential investment opportunities.
While the company does not pay a dividend, the liquidity position appears strong, with liquid assets exceeding short-term obligations. This could provide some reassurance to investors regarding the company's short-term financial stability amidst its equity offering. For a more detailed assessment, including fair value estimates, visit InvestingPro.
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