Investors might want to bet on Tree.com (TREE), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.
Analysts' growing optimism on the earnings prospects of this mortgage lending service provider is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Tree.com, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The company is expected to earn $0.74 per share for the current quarter, which represents a year-over-year change of +5.71%.
Over the last 30 days, the Zacks Consensus Estimate for Tree.com has increased 435.29% because three estimates have moved higher compared to no negative revisions.
For the full year, the company is expected to earn $3.92 per share, representing a year-over-year change of +22.88%.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Tree.com. Over the past month, three estimates have moved higher compared to one negative revision, helping the consensus estimate increase 111.29%.
The promising estimate revisions have helped Tree.com earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for Tree.com have attracted decent investments and pushed the stock 7.8% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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LendingTree, Inc. (TREE) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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