TREE trade ideas
Potential Revenue Beat of up to 29%EPSBeat algorithm has detected a potential revenue beat of up to 29% on ticker NASDAQ:TREE . NASDAQ:TREE is set to report third-quarter 2020 results on Nov 5, before market open.
EPSBeat's algorithm has successfully predicted 13/14 earnings beats for the week of Oct 26 .
The tickers that beat were NYSE:CHGG , NASDAQ:HSII , NASDAQ:HSTM , NYSE:TNET , NASDAQ:HLIT , NASDAQ:FEYE , NYSE:FVRR , NASDAQ:EEFT , NASDAQ:AVT , NASDAQ:WDC , NYSE:TAP , NASDAQ:OSTK , NYSE:SHOP .
The ticker that missed was NYSE:RL .
LendingTree: Bullish Technicals and Fundamentals ExplainedIn this analysis, I'll be providing an in-depth analysis on LendingTree, as well as an explanation on megaphone patterns and its bullish upside.
What is LendingTree Inc.?
Lendingtree (TREE) is a company that offers a platform for borrowers and multiple lenders, offering the opportunity for its users to find the best possible deal on their loans.
Business Model
- Users of TREE gain access to multiple loan offers, and TREE’s clients gain the benefit of a cost-efficient customer acquisition.
- Essentially, LendingTree is a platform where people shop for money.
- Lendingtree works with major banks such as Citibank, Wells Fargo, as well as mortgage brokers, p2p specialty finance institutions, and small businesses.
- Their clients’ pain point is that borrower acquisition is a key constraint to growth.
- They offer a personalized platform called My LendingTree in which users can track their financial credit and performance
- Their cumulative user growth has been increasing at an exponential rate
- One fact many people misunderstand is that LendingTree does not take a markup fee.
- Their revenue comes from the payments made by lenders (their institutional clients), who pay to join the LendingTree marketplace.
- TREE also gets paid by their clients when its users sign up for their loans or services.
- While mortgage loans are their main focus, they are expanding into areas of: personal loans, auto loans, business loans, student loans, credit cards, saving accounts, and home equity loans.
Financials
- LendingTree’s revenue has tripled to $1.1 Billion by the end of 2019, almost triple the revenue of 2016.
- They continue to demonstrate tremendous growth as consumers shop for mortgages over time
- While their revenue was dominantly mortgage based, they have managed to diversify into generating revenue from non-mortgage related loans and services.
- However, their operating expenses have also significantly increased due to huge marketing budgets, and their operating income is not as exponential as their revenue growth
- Their quarterly revenue changes have been showing inconsistencies, and reported negative earnings for 2020 Q2.
- However, the company demonstrates steady and strong free cash flow
Technical Analysis
- We can take a look at TREE’s weekly chart for long term insight
- To begin with, the chart is currently trading within a textbook megaphone pattern
- A megaphone pattern can be a continuation or reversal pattern depending on how prices react near the resistance
- This pattern demonstrates 5 distinct swings, each getting larger than the previous one,
- As demonstrated above, we are currently in the middle of the fifth swing
- We can see that a reverse head and shoulders pattern has been forming since the third swing.
- We have temporarily broken out of the descending trend line resistance (marked by the dotted blue line), and forming what seems to be the right shoulder
- The formation of the right shoulder can also be seen as a bullish flag pattern, where prices are consolidating before a breakout
- On the short term, we are consolidating below the 0.618 Fibonacci retracement resistance.
- We have tested the pivot line support, as prices look to break out
- Even if we see a rejection at the trend line resistance on the fifth swing, there is a 60% upside potential based on the megaphone pattern structure
Conclusion
With the Fed having said that interest rates will remain at near zero, and considering the fact that the US housing market is still in an uptrend, given that we see more recovery in the economy, we could anticipate huge growth for LendingTree as more users seek to get loans. The technicals demonstrated on LendingTree’s chart are also extremely bullish, making this stock a solid mid-term investment.
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$TREE lending Tree Huge Guidance review
Bullish trendline break and added another 4%
afterhours on a revenue guide raise.
-Source the fly.
LendingTree raises Q2 revenue view to $182M-$186M from $160M-$175M .
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TREEHolding the 20 day so far. Looks like it wants to battle that trendline again. Like it long above.
Risky lending Tree Trade Into Earnings
Possible short squeeze post earnings with 20% held short
LendingTree, Inc. engages in the operation of online loan marketplace for consumers seeking loans and other credit-based offerings. It provides mortgage loans, home equity, reverse mortgage, auto loans, credit cards, personal loans, student loans, and small business loans. The company was founded Douglas Lebda in April 2008 and is headquartered in Charlotte, NC.
InterestingWait until earnings, it might fall to that pink line and then bounce back. As long as it stays above the bottom trend line, my target would be 380.
Reversal trade potential in LendingTree Stock still 30% off its highs, catch up trade potential
Indicators in bullish reversal.
Short interest 17%
Average analysts price target $357
Recent analysts commentary
LendingTree analyst commentary at Stephens Stephens says LendingTree low bar to start 2020 sets up beat and raise potential. Stephens analyst John Campbell lowered his revenue assumptions for LendingTree based on the company's new 2020 guidance, but said he sees "plenty of conservatism" baked into a few of the company's product growth trajectories, particularly Insurance. He also lowered his EBITDA estimate based on the company's guidance, but added that his new 2021 estimates call for accelerating growth and adjusted EBITDA margin expansion as he thinks heightened 2020 brand spending will yield better growth at higher margins. The analyst, who thinks the "low bar" set to start 2020 puts beat and raise potential in place, keeps an Overweight rating on LendingTree but trimmed his price target on the shares to $450 from $465
thefly.com
Company profile
LendingTree, Inc. engages in the operation of online loan marketplace for consumers seeking loans and other credit-based offerings. It provides mortgage loans, home equity, reverse mortgage, auto loans, credit cards, personal loans, student loans, and small business loans. The company was founded Douglas Lebda in April 2008 and is headquartered in Charlotte, NC.
TREE - Trade set upLook at the gap to the next moving average on the weekly chart, 200 MA. If we break this weekly hammer candle we could have a nice little slide to the this next support. If it bounces this would be a nice buying opportunity for a long swing also. Good money to be made either way
Looks like it is in distributionThis may drop even further before finding the support, for now it seems to be right on the support(break down possible in coming days)
Accumulation Zone Entry For $TREETREE As noted in my previous post on LendingTree (linked) this is a patient trade that requires a trader to display discipline and belief in the trading plan. The accumulation zone was noted as 285-270 in previous post, and this week TREE hit sub 285 for the first time on the pullback in formation of a true cup and handle pattern. I say "true" cup and handle because that--along with head and shoulders--are the most misused patterns I notice on this site. The true cup and handle is a continuation pattern that should occur at the top of an uptrend, and the handle portion should retrace about 2/3 of the cup depth. So, if you are looking to add to or get in TREE, I say now is the time. The handle bottom should coincide with the uptrend support line and the 125 moving avaerage, which this stock respects. First target will be 450ish, with the very real possibility of this stock ending up well over 500 in the next few years, macro conditions permitting. Happy hunting and GLTA!!
Patient trade here. Wait for the accum zone...TREE Dont jump the gun on this one, but rather over the next 6 weeks begin accumulating some Lending Tree shares or options in anticipation of a continuation pattern upwards. See below for more close up look. The cup and handle pattern is one of the most misused patterns I see on here, as everyone just wants to call any round bottom a "cup and handle". They are not. A true cup and handle is a continuation patters coming off an uptrend. The "cup" forms, and then the handle needs to retrace approximately 2/3 of the cup depth, or usually right around the .618 fib zone. That is the buy area. In this case, puts your accumulation zone around 285-270 for the ride back up. In addition, this stock has respected the weekly 125 MA at each pullback in its uptrend thus far, and I expect no major deviance here. However, if the stock falls below 250 the pattern is negated and the loss needs to be cut at 7%ish. Happy hunting, and GLTA!!
$TREE HEADING FOR A BREAKOUT AT $400THERE IS BOTH A SHORT AND LONG OPPORTUNITY IN NASDAQ:TREE , THE STOCK IS SETTING UP FOR A BREAKOUT BUT THERE IS SOME BEARISH DIVERGENCE ON THE CHART, A BREAK OF $400 BULLISH, ON THE OTHER HAND A FAILED BREAKOUT IS A FANTASTIC OPPORTUNITY TO SHORT.
SHORT INTEREST 24%
COMPANY PROFILE
LendingTree, Inc. engages in the operation of online loan marketplace for consumers seeking loans and other credit-based offerings. It provides mortgage loans, home equity, reverse mortgage, auto loans, credit cards, personal loans, student loans, and small business loans.
$TREE - It's stuff like this that shouldn't surprise anyoneIt's been a little difficult finding charts worth my time to post. Not only because just about every ticker is in top 10% of its historical IV% percentile, but to me, I just don't see the opportunities some other people might in being long. Nonetheless, I still don't even think people completely understand the fragility of our financial market. Not only are financials beginning to drown into a bear market, but the justification for some is that, on a P/E basis, the market is cheap compared to back in 2015. What most everyone doesn't realize is that the bull market came from a surge in the dollar from 2015 when the fed merely "Announced" they'd begin raising rates. Which, back then, weren't even half of what rates are now. The plummeting of oil that dropped a barrel down to $26, came from that significant of a "flight to safety" for the dollar because of the possibility of risk free returns at such a low interest rate. It should be 0.0000% of a surprise that the dollar WON'T make a higher high than it did in 2016-2017 even WITH a 10 year yield of over 3.25%. Some people are also confused about why the fed continues to raise rates given the low inflation measures that've been coming in - needless to say there's a deficit that continues to climb to record highs that has to be funded somehow, right? Treasury can't continue to sell bonds unless investors are given an attractive incentive of a higher interest rate. Which I went the extra mile to use the BEA IAT (International Accounts of Transactions) to look @ foreign direct inflow of investments to see just how much of a demand there is for US bonds - since 1984, the US has only seen negative inflow of investments in 2018, 2014 (when we almost defaulted on our debt), 2005, & 2003. So really, it shouldn't be a surprise to anyone when the fed continues to raise rates - let alone every commercial bank, financial group, industrial bank, or other lender continues to severely underperform the S&P.
stockcharts.com
Tree43% discount from the high, it will drop more and then go back to new highs longer term once even more credit gets unleashed in the system.
Short for now is easy money.
Really does not mather how expensive the optionchain is, nothing is stopping this from falling further atm.
I would suggest some medium term options (half year) nothing more.
TREE - more to go I think Huge move today and still more to day. I like this to the 100MA on the weekly chart. I love the last 2 times we had big moves on the stick because it ran for multiple days and big moves.
