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Tree.com (TREE) Soars 19.0%: Is Further Upside Left in the Stock?

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Tree.com (TREE - Free Report) shares soared 19% in the last trading session to close at $49.32. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.6% gain over the past four weeks.

The stock witnessed a strong price increase driven by a favorable legal ruling. On January 24th, the 11th district ruled in TREE's favor, as it was deemed that one-to-one consent was an overstep by the Federal Communications Commission (FCC). Additionally, the new administration issued a 12-month stay soon before the court's decision. Given the current administration, TREE believes this issue won't likely come up again and that all uncertainity should be eliminated moving forward.

TREE faced concerns about a proposed FCC rule change requiring lead generators to obtain "one-to-one" consent before contacting consumers. The rule posed challenges to TREE's business model, including limited lead generation, restricted lead resale, and reduced dependence on third-party lead generators. The 11th Circuit Court ruled in favor of IMC, stating the FCC exceeded its authority under the Telephone Consumer Protection Act and violated the First Amendment. TREE will not need to add an extra step, and the Active Chief postponed the effective date for revisions to January 26, 2026.

This is a positive development for TREE, resolving uncertainties that previously threatened its business model and clearing the path for continued growth.

This mortgage lending service provider is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of +142.9%. Revenues are expected to be $235.77 million, up 75.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Tree.com, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TREE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Tree.com is part of the Zacks Financial - Mortgage & Related Services industry. Federal Agricultural Mortgage (AGM - Free Report) , another stock in the same industry, closed the last trading session 1.4% higher at $198.72. AGM has returned -0.6% in the past month.

For Farmer Mac, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $4.16. This represents a change of +1.5% from what the company reported a year ago. Farmer Mac currently has a Zacks Rank of #3 (Hold).


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