Citi Upgrades Tree.com (TREE) to Buy; Fundamentals Generally Positive
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Citi upgrades Tree.com (Nasdaq: TREE) from Hold to Buy. Price target increased from $6 to $13.
Citi analyst says, "Despite a 244% surge in the shares YTD, TREE's market cap ($87MM) is only $6MM (7%) above its current cash position ($81MM). Yet we point to: 1) The fact that Q1 cash levels rose $8MM Q/Q; 2) The fact that TREE generated a 15% EBITDA margin in Q1 in arguably the worst Lending Recession in generations; 3) Management's statement that it did not anticipate having to increase marketing expense through the balance of the year to drive additional volume; 4) Our estimate that TREE can generate $15MM+ in '09 EBITDA even with No Q/Q growth in Closed Units for any of its segments until Q4 and no further Q/Q opex leverage through the balance of the year; and 5) Our consistent view that TREE has a very experienced management team and a strong brand."
Tree.com, Inc. (Tree.com), through its subsidiaries, operates a lending business (the Lending Business) and a real estate business (the Real Estate Business).
To see more analyst ratings on TREE Click Here.
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