Bob Peck: Lending Tree's 2016 Guidance Is Conservative

Lendingtree Inc

shares have been lower in the past two months, based on concerns that in SunTrusts' view, have developed an "attractive buying opportunity" for the patient trader. Shares of TREE jumped 9.14 percent on Thursday. The firm had reduced its PT to $120 from $150 to reflect a re-rated market, and reiterated a Buy rating for TREE. "Fundamentals remain strong as TREE benefits from the underlying secular shift to online. The stock is trading at a significant discount to peers currently; when TREE provides "increased" 2016 guidance, the discount could look conservative. The ~$60M share buyback could start any day now," SunTrust noted. Several concerns were raised for investors. "While we have updated our 4Q'15 estimates, and adjusted 2016 quarters for seasonality, we have left our 2016 annual projections largely unchanged. Given the momentum we are seeing in the underlying business, we think the current 2016 guide is conservative in that it implies the company will virtually come to a standstill in 2H'16," the firm commented. Shares had declined ~30 percent on outsized trading volume on Tuesday. There had been many investor concerns which focused on many key issues. "The company had released 2015 guidance for the first time in January 2015 ahead of a competitor conference which it had updated the 4Q'14 outlook. This time, however, the company only updated 4Q'15 outlook. While it discussed the strong trends have continued into 2016, the company did not update the 2016 guidance it had provided in late-October," the firm noted.