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Real Matters Inc (TSE:REAL)
TSX:REAL
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Real Matters Inc
(TSX:REAL)
51Neutral
Positive Factors
Client Expansion
REAL launched three new U.S. Title clients in the quarter and gained share with its Tier 1 client.
Customer Base
REAL has a strong customer list and a good track record of demonstrating operating leverage in prior cycles.
Market Share
REAL gained market share with three Tier 1 clients during the quarter despite industry volume decreases.
Negative Factors
Earnings Performance
Q4/24 results were below consensus due to softness in US Appraisal volumes.
Mortgage Rates Risk
There is a risk that mortgage rates could stay higher for longer, affecting the stock's valuation.
Valuation Concerns
The stock is viewed as fairly valued relative to forecasts and the potential risk that mortgage rates could stay higher for longer.
Real Matters Inc (REAL) vs. S&P 500 (SPY)
Market Cap
C$403.34M
Dividend YieldN/A
Average Volume (3M)66.81K
Price to Earnings (P/E)49.4
Beta (1Y)0.86
Revenue Growth12.27%
EPS GrowthN/A
CountryCA
Employees338
SectorTechnology
Sector Strength51
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.11
Shares Outstanding74,008,000
10 Day Avg. Volume72,188
30 Day Avg. Volume66,811
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.30
Price to Cash Flow (P/CF)51.60
P/FCF Ratio54.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$8.00Price Target Upside44.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Real Matters Inc Business Overview & Revenue Model
Company DescriptionReal Matters Inc (REAL) is a technology company operating in the real estate services sector. It specializes in providing software and services that streamline the mortgage lending and insurance industries. The company's core offerings include property appraisal, title, and mortgage closing services, leveraging its proprietary platforms to improve efficiency and accuracy for its clients.
How the Company Makes MoneyReal Matters Inc generates revenue primarily through its technology-driven platforms that facilitate real estate services such as property appraisals and title services. The company earns money by charging fees for each transaction processed through its platforms. A significant portion of its revenue comes from partnerships with major banks, mortgage lenders, and insurance companies who rely on Real Matters to handle various stages of the mortgage process. Additionally, the company benefits from its scalable business model, which allows it to increase transaction volumes and expand its client base without proportional increases in operational costs.
Real Matters Inc Financial Statement Overview
Summary
Real Matters Inc faces challenges with declining revenues and profitability, but maintains a strong balance sheet with low debt. Cash flow management has improved, but inconsistencies and external financing reliance pose risks. Overall, financial stability is moderate with potential for improvement.Income Statement
Real Matters Inc has shown a declining revenue trend with a significant drop from 2020 to 2024. Gross profit margins are relatively stable, but net profit margins have improved recently, indicating better cost management. However, EBIT and EBITDA margins are weak, suggesting operational challenges.45
Neutral
Balance Sheet
The company maintains a strong equity ratio and low debt levels, indicating a solid financial structure. However, the declining total assets and stockholders' equity over time raise concerns about asset management and growth potential.60
Neutral
Cash Flow
Cash flow from operations has improved from negative to positive, indicating better cash management. However, the free cash flow growth is inconsistent, and reliance on external financing is evident, posing potential risks.55
Neutral
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 178.26M | 172.72M | 163.91M | 339.64M | 504.11M | 455.94M | Gross Profit |
| 47.54M | 46.36M | 43.02M | 22.66M | 78.50M | 89.62M | EBIT |
| 1.22M | 0.00 | -3.74M | 1.38M | 51.86M | 65.89M | EBITDA |
| 4.84M | 2.70M | -5.06M | 5.91M | 56.91M | 70.35M | Net Income Common Stockholders |
| 5.90M | 18.00K | -6.17M | -9.27M | 32.99M | 41.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 49.05M | 49.14M | 42.34M | 46.14M | 60.21M | 129.16M | Total Assets |
| 126.76M | 134.28M | 128.74M | 137.00M | 194.34M | 249.72M | Total Debt |
| 2.53M | 2.82M | 4.10M | 5.86M | 8.04M | 7.90M | Net Debt |
| -46.51M | -46.32M | -38.24M | -40.28M | -52.17M | -121.25M | Total Liabilities |
| 14.94M | 18.58M | 17.16M | 22.00M | 34.79M | 37.51M | Stockholders Equity |
| 111.83M | 115.70M | 111.58M | 114.89M | 159.44M | 209.00M |
| Cash Flow | Free Cash Flow | ||||
| 3.59M | 4.67M | -3.59M | 16.39M | 22.00M | 72.86M | Operating Cash Flow |
| 4.40M | 5.45M | -2.56M | 17.57M | 25.02M | 74.69M | Investing Cash Flow |
| -263.00K | -169.00K | -799.00K | -1.08M | -2.88M | -1.83M | Financing Cash Flow |
| 1.25M | 1.42M | -445.00K | -30.42M | -94.05M | -15.20M |
Real Matters Inc Technical Analysis
Negative
5.52
Price Trends
5.85
Negative
6.29
Negative
6.96
Negative
Market Momentum
-0.11
Positive
41.93
Neutral
45.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:REAL, the sentiment is Negative. The current price of 5.52 is below the 20-day moving average (MA) of 5.80, below the 50-day MA of 5.85, and below the 200-day MA of 6.96, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 41.93 is Neutral, neither overbought nor oversold. The STOCH value of 45.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:REAL.
Real Matters Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.23B | 10.35 | 16.00% | 4.11% | -3.59% | 432.46% | |
68 Neutral | C$4.67B | 157.81 | -0.10% | ― | 14.85% | -105.25% | |
59 Neutral | C$1.94B | ― | -5.18% | ― | 23.95% | 39.68% | |
57 Neutral | $20.06B | 9.61 | -11.19% | 2.76% | 5.41% | -24.85% | |
54 Neutral | $2.62B | ― | -7.59% | ― | -31.15% | 30.02% | |
51 Neutral | C$403.34M | 49.41 | 5.27% | ― | 12.27% | ― | |
48 Neutral | C$565.82M | ― | -42.62% | 0.91% | 2.97% | 25.63% |
* Technology Sector Average
Performance Comparison
TSE:REAL
Real Matters Inc
5.52
-0.15
-2.65%
TSE:BB
BlackBerry
4.46
0.68
17.99%
TSE:OTEX
Open Text
35.45
-10.54
-22.91%
TSE:KXS
Kinaxis Inc
166.26
15.95
10.61%
TSE:LSPD
Lightspeed POS Inc
12.67
-5.08
-28.62%
TSE:DND
Dye & Durham
8.42
-7.01
-45.43%
Real Matters Inc Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -16.36% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth across all segments, driven by new client acquisitions and increased market share, particularly in the US title and Canadian segments. However, challenges remain in the form of reduced margins and increased operating expenses in the US appraisal segment, as well as overall adjusted EBITDA losses. Despite these challenges, the company maintains a strong balance sheet and is well-positioned for future growth.Highlights
Overall Revenue Growth
Consolidated revenue grew by 16% year-over-year, with net revenue increasing by 12%, driven by all three segments.
US Title Segment Performance
US title revenues increased by 25%, with refinance origination revenues up 53% due to net market share gains and higher volumes.
Canadian Segment Success
Canadian revenues increased by 38% year-over-year, and net revenue margins remained near all-time highs at 18.9%.
New Client Acquisitions
The company launched five new clients and one new channel, with particular success in the US title segment.
Strong Balance Sheet
Real Matters maintained a strong balance sheet with no debt and $49 million in cash as of December 31, 2024.
Lowlights
US Appraisal Segment Challenges
US appraisal net revenue margins decreased by 140 basis points, and the segment saw increased operating expenses due to non-recurring claim expenditures and higher legal fees.
US Title Segment Loss
The US title segment recorded an adjusted EBITDA loss of $1.8 million, higher than the $1.6 million loss recorded in the same period last year.
Overall Adjusted EBITDA Loss
The company recorded a consolidated adjusted EBITDA loss of $1.7 million, compared to a loss of $1.1 million in the first quarter of fiscal 2024.
Company Guidance
During Real Matters' first quarter earnings call for the fiscal year 2025, management provided guidance highlighting significant growth across its business segments. Consolidated revenue increased by 16% year-over-year to $41 million, with net revenue rising 12% to $10.9 million. The US appraisal segment saw a 9% revenue increase, while the US title segment experienced a 25% revenue growth, driven by a 53% increase in refinance origination revenues. In Canada, revenues surged by 38% year-over-year. The company also reported a net revenue margin of 26.5% for the US appraisal segment and a 53.4% margin for the US title segment. Adjusted EBITDA showed a loss of $1.7 million, compared to a $1.1 million loss in the previous year, mainly due to increased operating expenses. Despite these challenges, Real Matters launched five new clients and remained optimistic about capturing additional market share, particularly in the US title business, and highlighted a strong balance sheet with $49 million in cash and no debt.Real Matters Inc Corporate Events
Financial Disclosures
Real Matters to Release Q2 Fiscal 2025 Financial Results
Neutral
Apr 2, 2025
Real Matters Inc. announced it will release its second quarter fiscal 2025 financial results on April 30, 2025, before market opening. A conference call hosted by CEO Brian Lang and CFO Rodrigo Pinto will follow to discuss the results, with a webcast and transcript available post-call. This announcement is significant as it provides stakeholders with insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor relations.
Executive/Board ChangesShareholder Meetings
Real Matters Announces Successful Election of Board of Directors
Positive
Feb 6, 2025
Real Matters Inc. has announced the successful election of all nominees proposed by management to its board of directors during its Annual Meeting of Shareholders. This includes six directors who received substantial support, reflecting strong shareholder confidence and potentially strengthening Real Matters’ governance and strategic direction. The detailed voting results will be made available on their website and with Canadian securities regulators.
Business Operations and StrategyFinancial Disclosures
Real Matters Inc. Achieves Strong Q1 Growth Amid Refinancing Surge
Positive
Jan 30, 2025
Real Matters Inc. reported a robust first quarter financial performance with consolidated revenue reaching $41.0 million, marking a 16% increase year-over-year. Notably, the U.S. Title segment saw a 46% rise in refinance origination volumes, driving a 610 basis points increase in Net Revenue margins. The company’s strategic alignment with market conditions and its anticipation of new franchise title clients reflects their confidence in capturing market potential amidst a significant pool of refinancing opportunities.
Real Matters to Host Virtual Annual General Meeting in 2025
Jan 16, 2025
Real Matters Inc. announced that it will hold its Annual General Meeting virtually on February 6, 2025. Shareholders and proxyholders can vote and participate in the meeting through an online audio webcast, with certain restrictions for non-registered shareholders and guests. The move to a virtual format reflects ongoing efforts to engage stakeholders efficiently and provide accessible participation options.
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.