Redfin Corporation (RDFN) can make a big difference with a little luck

Redfin Corporation (NASDAQ: RDFN) stock fell -1.75% on Tuesday to $6.18 against a previous-day closing price of $6.29. With 2.7 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.32 million shares. During the session, the Real Estate Services company that operates in wider Real Estate sector, reached to the highest price of $6.59 whereas the lowest price it dropped to was $6.14. The 52-week range on RDFN shows that it touched its highest point at $32.30 and its lowest point at $3.08 during that stretch. It currently has a 1-year price target of $4.23. Beta for the stock currently stands at 2.02.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RDFN was down-trending over the past week, with a drop of -1.90%, but this was up by 30.66% over a month. Three-month performance surged to 53.73% while six-month performance fell -32.39%. The stock lost -78.49% in the past year, while it has gained 45.75% so far this year. A look at the trailing 12-month EPS for RDFN yields -2.69 with Next year EPS estimates of -1.55. For the next quarter, that number is -1.05. This implies an EPS growth rate of -378.90% for this year and 55.30% for next year.

Float and Shares Shorts:

At present, 108.62 million RDFN shares are outstanding with a float of 104.92 million shares on hand for trading. On Dec 29, 2022, short shares totaled 18.0 million, which was 16.56% higher than short shares on Nov 29, 2022. In addition to Mr. Glenn Kelman as the firm’s Pres, CEO & Director, Mr. Chris Nielsen serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 83.28% of RDFN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.39% of RDFN, in contrast to 36.90% held by mutual funds. Shares owned by individuals account for 35.66%. As the largest shareholder in RDFN with 18.28% of the stake, Bares Capital Management, Inc. holds 19,883,921 shares worth 19,883,921. A second-largest stockholder of RDFN, The Vanguard Group, Inc., holds 13,794,242 shares, controlling over 12.69% of the firm’s shares. Baillie Gifford & Co. is the third largest shareholder in RDFN, holding 9,757,578 shares or 8.97% stake. With a 4.09% stake in RDFN, the Vanguard US Growth Fund is the largest stakeholder. A total of 4,448,817 shares are owned by the mutual fund manager. The Vanguard Real Estate Index Fund, which owns about 3.68% of RDFN stock, is the second-largest Mutual Fund holder. It holds 3,998,357 shares valued at 16.95 million. Towers Watson Global Equity Focus holds 3.19% of the stake in RDFN, owning 3,473,465 shares worth 14.73 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Sep 29, 2022, RDFN reported revenue of $606.91M and operating income of -$61.98M. The EBITDA in the recently reported quarter was -$45.36M and diluted EPS was -$0.73.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RDFN since 18 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 15 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RDFN analysts setting a high price target of $5.50 and a low target of $2.00, the average target price over the next 12 months is $4.25. Based on these targets, RDFN could drop -11.0% to reach the target high and fall by -67.64% to reach the target low. Reaching the average price target will result in a decline of -31.23% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. RDFN will report FY 2022 earnings on 02/16/2024. Analysts have provided yearly estimates in a range of -$3.07 being high and -$3.63 being low. For RDFN, this leads to a yearly average estimate of -$3.43. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Redfin Corporation surprised analysts by -$0.03 when it reported -$0.83 EPS against a consensus estimate of -$0.80. The surprise factor in the prior quarter was -$0.12. Based on analyst estimates, the high estimate for the next quarter is -$0.65 and the low estimate is -$1.21. The average estimate for the next quarter is thus -$1.02.

Summary of Insider Activity:

Insiders traded RDFN stock several times over the past three months with 18 Buys and 16 Sells. In these transactions, 37,629 shares were bought while 8,275 shares were sold. The number of buy transactions has increased to 100 while that of sell transactions has risen to 95 over the past year. The total number of shares bought during that period was 790,759 while 362,915 shares were sold.

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