NerdWallet vs. LendingTree: Which Digital Finance Platform to Bet On?

Core Insights - The digital finance landscape is competitive, with NerdWallet, Inc. (NRDS) and LendingTree, Inc. (TREE) as key players, each with distinct business models and growth strategies [1][2] Group 1: NerdWallet (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 position, offering resources that empower individuals and small to medium businesses (SMBs) to make informed financial decisions [4] - NRDS's platform covers a wide range of financial products, including credit cards, mortgages, and personal loans [5] - The user base has significantly grown, aided by collaborations with financial institutions and a recent acquisition of Next Door Lending to enhance mortgage offerings [6] - NRDS is expanding internationally, with growth opportunities in the U.K., Canada, and Australia, and is well-positioned for sustained growth [7] - Projected adjusted EBITDA for 2025 is between $141 million and $145 million, an increase from the previous estimate of $106 million to $116 million [7] Group 2: LendingTree (TREE) - TREE functions as an online marketplace connecting consumers with financial service providers, focusing on diversifying its offerings beyond mortgages [8] - The company has expanded its services to include credit cards and various loan types, launching its first consumer credit product, WinCard, in 2023 [9] - TREE's adjusted EBITDA increased by 48% year over year in the third quarter of 2025, with projections for 2025 adjusted EBITDA between $126 million and $128 million [12] - The company is leveraging data and technology to enhance user experience and expand its marketplace offerings [11] Group 3: Earnings Estimates and Valuation - The Zacks Consensus Estimate for NRDS indicates a year-over-year earnings increase of 720% for 2025 and 49.6% for 2026 [13] - In contrast, TREE's earnings growth is projected at 50.2% for 2025 and 5.7% for 2026 [16] - NRDS shares have gained 29.1% over the past three months, while TREE shares have declined by 10.1%, indicating stronger investor sentiment towards NRDS [19] - Valuation metrics show TREE trading at a forward price-to-book (P/B) multiple of 5.5X, while NRDS is at 2.5X, suggesting NRDS is currently undervalued [21] Group 4: Investment Outlook - NRDS's scalable affiliate model, strong brand, and user growth position it favorably for long-term growth, supported by strategic acquisitions and international expansion [23] - Financially, NRDS presents a more attractive growth profile with higher projected earnings and lower valuation compared to TREE, which faces slower earnings growth and a richer valuation [24] - NRDS holds a Zacks Rank 1 (Strong Buy), while TREE has a Zacks Rank 3 (Hold), reflecting differing investor confidence levels [27]