Bob Peck Still Buying LendingTree, Sees $90 Per Share

On Monday, SunTrust Robinson Humphrey issued a report on Lendingtree Inc (NASDAQ: TREE) amid concerns over the future growth of the company. Currently, analysts at SunTrust rate LendingTree as a Buy, while lowering their price target from $120 to $90.

Robert Peck and Matthew Thornton, analysts at SunTrust Robinson Humphrey, wrote, "LendingTree shares have declined more than 30 percent in the year-to-date on a variety of investor concerns ranging from macro to company-specific issues [...]While we reduce PT to $90 from $120 to reflect a re-rated market, we think the risk-reward is favorable. Reiterate Buy."

Related Link: Analysts Say LendingTree's 25% Selloff Is Unjustified

Key Catalysts Moving Forward

Analysts at SunTrust highlighted two key catalysts that could drive the company going forward:

1. Top-Line Growth
SunTrust believes Wall Street's estimate of 25 percent year-over-year top-line growth for 2016 is conservative given LendingTree's 2015 revenue growth of around 50 percent. If LendingTree can grow its loans at a higher rate than estimates, the company's stock value could increase substantially.

2. Advertising Investments
The analysts noted that LendingTree spent over $1 million on TV commercials in 2015. This investment has the potential to drive revenue growth and demand for their financial services over the following quarters, as new customers see the company's value proposition. However, the advertising expense may put pressure on LendingTree margins, which SunTrust believes investors have to be prepared for.

At the time of this publication, LendingTree was seen trading at $54.93, down 8.53 percent.

Image Credit: Public Domain