TREE

LendingTree has genuinely turned a corner: FY2025 revenue of $1.12B (+24.1% YoY) is a fresh high after the 2022–2024 slump ($985M→$673M→$900M), operating income grew 45.2% to $64.8M, and operating cash flow rose to $73.1M. After three straight years of net losses, the company printed $151M of net income and $10.78 diluted EPS. On the surface that is a 4.2x P/E and 0.6x sales — statistically very cheap for a business back to growth. The MD&A confirms real deleveraging discipline too: the 2025 Notes were fully repaid, the credit facilities were refinanced into a single $400M 2025 Term Loan, and management states cash flow should fund operations 'for the next twelve months and beyond.'

But the headline EPS is the catch, and it is why this is a hold rather than a buy. Net income of $151M is more than double operating income of $64.8M — the gap is almost certainly non-operating (a deferred-tax/valuation-allowance benefit, consistent with the still-deeply-negative -$728M accumulated deficit finally being drawn down). That means the '4.2x P/E' overstates real earnings power; on the 5.8% operating margin and heavy interest load from ~$390M of debt, normalized earnings are a fraction of the reported figure. Strip out the one-time boost and the stock is fairly — not cheaply — valued.