Analyst Mike Ng of Goldman Sachs maintained a Hold rating on Redfin (RDFN – Research Report), with a price target of $6.00.
Mike Ng has given his Hold rating due to a combination of factors affecting Redfin’s current financial position and future prospects. The fourth quarter of 2023 EBITDA for Redfin met consensus expectations, with revenues aligning closely with predictions. However, the first quarter of 2024 guidance was disappointing, with projected revenues only showing flat to minimal year-over-year growth, and anticipated gross margins and EBITDA for Real Estate Services falling short of expectations. Additionally, Redfin’s likelihood of meeting its target of trailing twelve months break-even EBITDA by the first half of 2024 seems diminished.
On the strategic front, Redfin is making significant changes, such as reintroducing its buyer rebate program and expanding its higher agent commission model, Redfin Next, to more markets. While early results from Redfin Next’s pilot markets show promising revenue growth, these adjustments aim to control fixed costs and improve profitability. Despite these positive strategic initiatives, the overall financial uncertainty and the potential downside as per the current stock price have led Ng to maintain a cautious Hold rating on Redfin’s stock.
RDFN’s price has also changed moderately for the past six months – from $9.300 to $7.000, which is a -24.73% drop .
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Redfin (RDFN) Company Description:
Redfin Corp. provides real estate brokerage services. The firm engages in buying and selling homes. It operates through the following segments: Real Estate Services and Properties. The Real Estate Services segment consists of revenue transactions. The Properties segment consists of home purchase costs, capitalized improvements, selling expenses and home maintenance expenses. The company was founded by David Selinger, David Eraker, and Michael Dougherty in 2004 and is headquartered in Seattle, WA.
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