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NEW YORK (TheStreet) -- Lendingtree (TREE) - Get Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate LENDINGTREE 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. The area that we feel has been the company's primary weakness has been its disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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, LENDINGTREE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LENDINGTREE INC is currently very high, coming in at 94.91%. Regardless of TREE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TREE's net profit margin of 35.64% compares favorably to the industry average.
  • LENDINGTREE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, LENDINGTREE INC's EPS of -$0.06 remained unchanged from the prior years' EPS of -$0.06. This year, the market expects an improvement in earnings ($1.26 versus -$0.06).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 7841.1% when compared to the same quarter one year prior, rising from -$0.20 million to $15.64 million.
  • This stock has increased by 39.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in TREE do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: TREE Ratings Report