Reviewing LendingTree (NASDAQ:TREE) & Zillow Group (NASDAQ:ZG)

LendingTree (NASDAQ:TREE) and Zillow Group (NASDAQ:ZG) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Volatility & Risk

LendingTree has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500.

Profitability

This table compares LendingTree and Zillow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LendingTree	-5.33%	25.79%	3.46%
Zillow Group	-2.60%	-1.26%	-1.04%

Earnings and Valuation

This table compares LendingTree and Zillow Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LendingTree	$900.22 million	1.09	-$41.70 million	($4.06)	-17.69
Zillow Group	$2.24 billion	9.14	-$112.00 million	($0.26)	-324.38

LendingTree has higher earnings, but lower revenue than Zillow Group. Zillow Group is trading at a lower price-to-earnings ratio than LendingTree, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

68.3% of LendingTree shares are held by institutional investors. Comparatively, 20.3% of Zillow Group shares are held by institutional investors. 23.4% of LendingTree shares are held by company insiders. Comparatively, 17.1% of Zillow Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for LendingTree and Zillow Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingTree	0	1	6	2	3.11
Zillow Group	1	11	13	0	2.48

LendingTree currently has a consensus target price of $65.38, suggesting a potential downside of 8.97%. Zillow Group has a consensus target price of $85.52, suggesting a potential upside of 1.40%. Given Zillow Group’s higher possible upside, analysts plainly believe Zillow Group is more favorable than LendingTree.

Summary

LendingTree beats Zillow Group on 8 of the 15 factors compared between the two stocks.

About LendingTree

LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.

About Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.