LendingTree (TREE) Surges 6.0%: Is This an Indication of Further Gains?

LendingTree (TREE) shares ended the last trading session 6% higher at $42.03. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 83.6% gain over the past four weeks.

LendingTree witnessed a rise in share price for the sixth consecutive day. While the Federal Reserve raised the interest rates at the end of two-day FOMC meeting yesterday, the officials acknowledged “the disinflationary process has started.” This indicates that the central bank is likely to end interest rate hikes soon. Thus, investors turned bullish, driving the TREE stock higher.

This mortgage lending service provider is expected to post quarterly loss of $0.27 per share in its upcoming report, which represents a year-over-year change of -92.9%. Revenues are expected to be $206.39 million, down 20.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For LendingTree, 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 belongs to the Zacks Financial - Mortgage & Related Services industry. Another stock from the same industry, Ellington Financial Inc. (EFC), closed the last trading session 3% higher at $14.14. Over the past month, EFC has returned 9.2%.

Ellington Financial Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.45. Compared to the company's year-ago EPS, this represents a change of +2.3%. Ellington Financial Inc. currently boasts a Zacks Rank of #3 (Hold).

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