LendingTree & NerdWallet: Which Digital Finance Stock is a Smart Bet?

Core Viewpoint - LendingTree, Inc. (TREE) and NerdWallet, Inc. (NRDS) are competing in the online lending market, each with distinct strategies and product offerings, facing challenges from changing consumer behaviors and market uncertainties [1][2]. Summary by Company NerdWallet, Inc. (NRDS) - NRDS operates primarily as an affiliate marketing provider, generating revenue through partnerships when users engage with financial products [3]. - The company has a strong market presence in personal finance, offering tools that help individuals and small to medium businesses make informed financial decisions [4]. - NRDS's application platform provides value across various financial products, including credit cards, mortgages, and personal loans [5]. - The user base has significantly grown, aided by strategic partnerships and the recent acquisition of Next Door Lending, enhancing its mortgage offerings [6]. - NRDS is expanding internationally, with growth opportunities in the U.K., Canada, and Australia, and expects adjusted EBITDA of $106-$116 million for 2025, slightly down from $108 million in 2024 [10]. LendingTree, Inc. (TREE) - TREE functions as an online marketplace connecting consumers with financial service providers, focusing on products like mortgages and personal loans [11]. - The company is diversifying its offerings, particularly in non-mortgage products, and has seen a compound annual growth rate of 3.3% in these revenue streams over the past three years [12][13]. - TREE is leveraging technology to enhance user experience and has made strategic investments, such as in EarnUp, to build a comprehensive financial health management ecosystem [14]. - The company anticipates adjusted EBITDA of $116-$126 million for 2025, indicating an increase of 11-21% from 2024 [14]. Financial Estimates Comparison - For NRDS, the Zacks Consensus Estimate for 2025 sales and EPS indicates year-over-year growth of 9.1% and 410%, respectively [15]. - For TREE, the estimates suggest year-over-year growth of 11.9% in sales and 20.7% in EPS [16]. Price Performance and Valuation - Both TREE and NRDS have underperformed the industry over the past year, with TREE showing modest gains while NRDS shares have significantly declined [20]. - TREE is trading at a forward price-to-sales (P/S F12M) multiple of 0.69X, below its five-year median of 0.74X, while NRDS is at 0.88X, below its median of 1.35X [21]. Final Thoughts - NRDS offers a scalable, content-driven platform with strong partner credibility and international growth potential, benefiting from a diversified product base [24]. - TREE is positioned as a lead-driven marketplace with a focus on technology and product expansion, making it attractive for monetizing user data and enhancing engagement [25].