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Redfin (RDFN)
NASDAQ:RDFN
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Redfin
(NASDAQ:RDFN)45Neutral
Positive Factors
Agent Growth
Redfin's agent count has increased by 25%, surpassing 2,200, indicating growth and potential for future revenue increases.
Partnerships
The partnership with Zillow will simplify Redfin's Rentals operations and is expected to more than triple Adj. EBITDA run-rate exiting 2025.
Negative Factors
Debt Obligations
Redfin still faces substantial debt obligations, with approximately $500 million maturing in 2027, necessitating sustainable free cash flow or refinancing.
Redfin (RDFN) vs. S&P 500 (SPY)
Market Cap
$802.57M
Dividend YieldN/A
Average Volume (3M)6.29M
Price to Earnings (P/E)―
Beta (1Y)3.72
Revenue Growth-4.16%
EPS Growth-17.19%
CountryUS
Employees4,693
SectorReal Estate
Sector Strength72
IndustryReal Estate
Share Statistics
EPS (TTM)-1.37
Shares Outstanding126,389,290
10 Day Avg. Volume9,135,631
30 Day Avg. Volume6,290,131
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.74
Price to Cash Flow (P/CF)3.00
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.94Price Target Upside25.04% Upside
Rating ConsensusHold
Number of Analyst Covering12
Redfin Business Overview & Revenue Model
Company DescriptionRedfin 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.
How the Company Makes MoneyRedfin makes money primarily through commissions earned on real estate transactions facilitated by its platform. When a property is sold using Redfin's brokerage services, the company earns a percentage of the property's sale price as commission. Additionally, Redfin generates revenue from its mortgage origination services, where it earns fees for originating and processing home loans. The company's title and settlement services also contribute to its earnings by charging fees for managing the closing process of real estate transactions. Significant partnerships with real estate agents and industry professionals, as well as its investment in technology to improve service efficiency, enhance Redfin's ability to attract customers and close transactions, further bolstering its revenue streams.
Redfin Financial Statement Overview
Summary
Redfin's financial performance is challenged by declining revenues, persistent losses, high leverage, and negative equity. These factors indicate financial instability and liquidity risks.Income Statement
Redfin's income statement shows a mixed performance with a decreasing revenue trend from 2022 to 2024, alongside negative net income and EBIT margins, indicating ongoing profitability challenges. The gross profit margin improved slightly in 2024 (34.91%) compared to 2023 (33.77%), reflecting some efficiency in managing costs. However, the net profit margin remains negative, highlighting persistent losses.45
Neutral
Balance Sheet
Redfin's balance sheet indicates financial strain, with a negative stockholders' equity in 2024 signaling potential solvency issues. The debt-to-equity ratio is not calculable for 2024 due to negative equity, but high total debt levels suggest significant leverage. The equity ratio for 2023 was 3.70%, indicating minimal equity backing for assets.35
Negative
Cash Flow
The cash flow statement reveals challenges in generating positive operating cash flow, with significant deterioration from 2023 to 2024. Free cash flow turned negative in 2024, reflecting difficulties in maintaining liquidity. The operating cash flow to net income ratio is negative, indicating inefficient cash generation relative to net income.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.04B | 976.67M | 2.28B | 1.92B | 886.09M | Gross Profit |
| 364.20M | 329.82M | 286.05M | 403.82M | 232.11M | EBIT |
| -155.25M | -210.12M | -322.86M | -109.95M | 792.00K | EBITDA |
| -94.78M | -53.04M | -175.89M | -42.93M | 21.87M | Net Income Common Stockholders |
| -164.80M | -130.03M | -321.14M | -109.61M | -36.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 124.74M | 191.71M | 362.10M | 624.74M | 1.06B | Total Assets |
| 1.01B | 1.15B | 1.57B | 2.02B | 1.36B | Total Debt |
| 604.92M | 1.01B | 1.35B | 1.54B | 635.04M | Net Debt |
| 480.18M | 860.05M | 1.11B | 949.38M | -290.24M | Total Liabilities |
| 1.10B | 1.11B | 1.47B | 1.67B | 730.14M | Stockholders Equity |
| -82.67M | 42.71M | 103.87M | 349.72M | 630.38M |
| Cash Flow | Free Cash Flow | |||
| -43.52M | 44.70M | 18.96M | -329.06M | 46.58M | Operating Cash Flow |
| -32.31M | 56.76M | 40.49M | -301.57M | 61.27M | Investing Cash Flow |
| 34.41M | 97.48M | -184.34M | -576.31M | -57.12M | Financing Cash Flow |
| -28.11M | -245.41M | -332.09M | 650.34M | 694.23M |
Redfin Technical Analysis
Negative
6.35
Price Trends
8.00
Negative
8.90
Negative
8.67
Negative
Market Momentum
-0.37
Positive
33.63
Neutral
9.06
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDFN, the sentiment is Negative. The current price of 6.35 is below the 20-day moving average (MA) of 8.05, below the 50-day MA of 8.00, and below the 200-day MA of 8.67, indicating a bearish trend. The MACD of -0.37 indicates Positive momentum. The RSI at 33.63 is Neutral, neither overbought nor oversold. The STOCH value of 9.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDFN.
Redfin Risk Analysis
Redfin disclosed 32 risk factors in its most recent earnings report. Redfin reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Redfin Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $2.60B | 24.93 | 3.51% | ― | 8.31% | -49.90% | |
63 Neutral | $1.53B | ― | -10.38% | 2.05% | 6.69% | -137.52% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $17.96B | ― | -2.31% | ― | 14.96% | 29.56% | |
55 Neutral | $390.53M | ― | -8.17% | ― | 0.99% | -30.39% | |
45 Neutral | $802.57M | ― | 199.35% | ― | -4.16% | -17.19% | |
44 Neutral | $875.46M | ― | -54.98% | ― | -25.81% | -34.43% |
* Real Estate Sector Average
Performance Comparison
RDFN
Redfin
6.35
-0.06
-0.94%
HOUS
Anywhere Real Estate ate
3.51
-2.17
-38.20%
ZG
Zillow Group Class A
72.79
18.76
34.72%
EXPI
eXp World Holdings
9.95
-2.07
-17.22%
REZI
Resideo Technologies
17.60
-4.74
-21.22%
OPEN
Opendoor Technologies
1.24
-1.71
-57.97%
Redfin Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -16.88% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Redfin showed strong revenue growth and improvements in adjusted EBITDA, supported by strategic partnerships and expansion of the sales force. However, challenges such as increased costs from transitions, flat market share, and a challenging housing market landscape were noted. The highlights and lowlights were balanced, reflecting both significant achievements and notable challenges.Highlights
Revenue Growth in Q4 2024
Redfin's fourth quarter revenue was $244 million, up 12% over the previous year, marking the fourth straight quarter of growth. Real estate services grew faster than at any point since Q4 2021.
Improvement in Adjusted EBITDA
Full year adjusted EBITDA loss was $27 million, an improvement of $53 million over 2023 and $165 million over 2022. The adjusted EBITDA loss in Q4 was $3 million, better than the $13 million loss in the prior year.
Expansion of Sales Force
Lead agent count increased by 25% from Q3, with over 2,200 agents as of the end of the quarter. New hires have been outperforming tenured agents at critical points in the sales cycle.
Rentals Partnership with Zillow
Redfin signed a partnership with Zillow, expected to double the number of high-quality apartment listings and strengthen the balance sheet with a $100 million payment.
Growth in Ancillary Sales
Title attach rates increased to 63% from 60% and mortgage attach rates surged to 29% in January. The title business generated $8 million in adjusted EBITDA for 2024, an improvement of $9 million over 2023.
Monetization Segment Growth
Monetization earned $15 million in 2024 adjusted EBITDA, up 46% from 2023.
Lowlights
Adjusted EBITDA Loss Below Guidance
Q4 adjusted EBITDA loss was below the guidance range due to higher-than-expected pay for real estate agents, influenced by one-time transition costs associated with Redfin Next.
Flat Market Share
Q4 real estate services market share was 0.72%, flat year-over-year due to the transition to Redfin Next, which led to some agents leaving and a temporary impact on sales.
Decline in Real Estate Services Gross Margin
From Q4 2023 to Q4 2024, gross margins declined by 60 basis points due to underestimated costs associated with the Next pay plan.
Challenges in the Housing Market
Home sales are unlikely to significantly recover in 2025, with interest rates expected to remain relatively high, making it hard for buyers to afford homes.
Net Loss Increase
Net loss was $36 million for Q4, compared to a net loss of $23 million in the prior year, primarily due to higher-than-expected transaction bonuses in the brokerage business.
Company Guidance
During the Redfin Corporation Quarter Four 2024 Earnings Call, CEO Glenn Kelman reported a fourth quarter revenue of $244 million, a 12% increase from the previous year, marking the company's fourth consecutive quarter of growth. Despite an adjusted EBITDA loss of $3 million, the company saw a yearly improvement, with a total adjusted EBITDA loss of $27 million for 2024, an improvement of $53 million from 2023. The company's real estate services market share remained flat at 0.72%, although Kelman expressed optimism about future growth due to a 25% increase in the lead agent census, which rose from 1,757 in Q3 to over 2,200. Redfin also entered a $100 million rentals partnership with Zillow to enhance its apartment listings and plans a 38% increase in 2025 advertising spend. For the first quarter of 2025, the company expects revenues between $214 million and $225 million and an adjusted EBITDA loss between $39 million and $32 million. The company aims for significant adjusted EBITDA profitability in 2025, supported by increased advertising and an expanded sales force.Redfin Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Redfin Partners with Zillow for Rental Listings
Neutral
Feb 11, 2025
On February 6, 2025, Redfin Corporation announced a new partnership and content license agreement with Zillow, Inc. This agreement allows Zillow to become the exclusive provider of rental listings on Redfin’s websites. As part of the deal, Zillow will make a $100 million upfront payment, and Redfin will restructure its rentals segment, which includes job eliminations affecting approximately 450 employees. This restructuring is expected to incur charges between $18 million and $21 million, with completion anticipated by the end of September 2025. The partnership is positioned to enhance Redfin’s rental listings offerings by leveraging Zillow’s extensive database, potentially improving Redfin’s market positioning in the online real estate space.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.