Tree.com (TREE) Moves 12.9% Higher: Will This Strength Last?

Tree.com (TREE) shares rallied 12.9% in the last trading session to close at $62.91. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.4% loss over the past four weeks.

The company's shares moved sharply higher after President Donald Trump announced plans for large-scale purchases of U.S. mortgage bonds aimed at lowering mortgage rates and easing housing affordability. The policy boosted investor sentiment across mortgage-related companies like TREE, as reduced borrowing costs are expected to support home purchases, increase loan origination and refinancing activity, and strengthen revenue outlook. Adding to the positive momentum, the company recently announced several key leadership promotions, including Ian Smith’s appointment as Chief Operating Officer, signaling management’s confidence in the company’s operational execution and long-term growth strategy.

This mortgage lending service provider is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of -22.4%. Revenues are expected to be $286.75 million, up 9.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Tree.com, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TREE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Tree.com is part of the Zacks Financial - Mortgage & Related Services industry. Zillow Group (ZG), another stock in the same industry, closed the last trading session 2% lower at $67.16. ZG has returned -6.7% in the past month.

Zillow's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.42. Compared to the company's year-ago EPS, this represents a change of +55.6%. Zillow currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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