Have you been paying attention to shares of Tree.com (TREE)? Shares have been on the move with the stock up 67.5% over the past month. The stock hit a new 52-week high of $65.42 in the previous session. Tree.com has gained 63.9% since the start of the year compared to the 10.7% move for the Zacks Finance sector and the 26.4% return for the Zacks Financial - Mortgage & Related Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 31, 2025, Tree.com reported EPS of $1.13 versus consensus estimate of $0.97.
For the current fiscal year, Tree.com is expected to post earnings of $4.37 per share on $1.03 in revenues. This represents a 36.99% change in EPS on a 14.93% change in revenues. For the next fiscal year, the company is expected to earn $4.7 per share on $1.1 in revenues. This represents a year-over-year change of 7.49% and 6.75%, respectively.
Valuation Metrics
Though Tree.com has recently hit a 52-week high, what is next for Tree.com? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Tree.com has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 14.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.3X. On a trailing cash flow basis, the stock currently trades at 19.7X versus its peer group's average of 7.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Tree.com currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Tree.com passes the test. Thus, it seems as though Tree.com shares could have a bit more room to run in the near term.
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LendingTree, Inc. (TREE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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