NEW YORK (TheStreet) -- Shares of Tree.com Inc. (TREE - Get Report) are higher by 3.83% to $24.71 on Thursday after the company announced the approval of up to an additional $10 million of common stock under the company's stock repurchase program.
"The expansion of our stock repurchase program reflects the board's and management's confidence in the company's future, our favorable cash position and our commitment to enhancing shareholder value," said Doug Lebda, Chairman and CEO of Tree.com.
On Tuesday, Tree.com reported adjusted EBITDA for the 2014 first quarter was $4.5 million, a 10% increase over the same period last year. Revenue for the most recent quarter was up 43% to $40.0 million.
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TheStreet Ratings team rates TREE.COM INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
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"We rate TREE.COM INC (TREE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been generally deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income has significantly decreased by 108.7% when compared to the same quarter one year ago, falling from $2.32 million to -$0.20 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, TREE.COM INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- TREE.COM INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TREE.COM INC continued to lose money by earning -$0.06 versus -$0.23 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus -$0.06).
- The gross profit margin for TREE.COM INC is currently very high, coming in at 95.87%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.55% is in-line with the industry average.
- Net operating cash flow has significantly increased by 61.57% to $5.57 million when compared to the same quarter last year. In addition, TREE.COM INC has also vastly surpassed the industry average cash flow growth rate of -14.92%.
- You can view the full analysis from the report here: TREE Ratings Report