Why LendingTree Stock Dived by Nearly 22% Today

LendingTree (NASDAQ: TREE) stock was looking more like a tired sapling as the trading week came to a close. The company released its first earnings report for 2026, and investors were obviously concerned about several aspects within it. On a generally good Friday for U.S. equities, LendingTree's shares lost almost 22% of their value.

A mixed first quarter

LendingTree's consolidated revenue for its first quarter was just over $327 million, 37% higher year over year. On the bottom line under generally accepted accounting principles (GAAP), the financial services company flipped to a net income of $17.3 million ($1.22 per share) from the year-ago loss of $12.4 million.

However, that profitability was well below the consensus analyst GAAP earnings-per-share (EPS) estimate of $1.47. On the other hand, the company beat the average pundit revenue projection of slightly under $316 million.

LendingTree has three reporting units. The largest, insurance, increased its take by 51% to just under $222 million, while its profit rose by 50% to almost $58 million.

This was followed by an 18% revenue increase (to a bit more than $66 million) for consumer, accompanied by a 21% rise in profit to $32.9 million. Finally, the home segment posted a 6% top-line improvement (to $39 million). However, home suffered a rather steep decline in profitability, which plummeted by 24% to $10 million.

Guidance got a boost

LendingTree raised its annual revenue and non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance.

For the former, it's now expecting $1.3 billion to $1.35 billion, up from the preceding forecast of nearly $1.28 billion to $1.33 billion. As for the latter, the new guidance is $152 million to $162 million. Prior to that, it stood at $150 million to $160 million.

Although there were some concerns in the first-quarter report, I don't think LendingTree deserved the investor drubbing it eventually took post-earnings. I feel its revenue growth across all three business units was telling, and I feel it still has plenty of potential for continued improvement.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.