Redfin downgraded to Sell from Neutral at Goldman Sachs

Goldman Sachs analyst Michael Ng downgraded Redfin (RDFN) to Sell from Neutral with a price target of $6.50, up from $6. With the shares up 22% in the last 12 months and now trading at 88-times estimated 2025 enterprise value to EBITDA, a premium to key peers such as Compass (COMP), Redfin’s valuation is unattractive and there is downside to consensus EBITDA estimates, the analyst tells investors in a research note. The firm says U.S. existing home sales have been stagnant at 3.84M and believe affordability could weigh on a housing recovery, creating risk to forecasts including Fannie Mae’s outlook for 4.5M U.S. existing home sales in 2025. In addition, agent commission pressures continue to intensify, which should pressure Redfin’s take-rate on commissions directly or reduce its differentiation as competitors reduce its rates, contends Goldman.