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Redfin (RDFN)
NASDAQ:RDFN

Redfin (RDFN) AI Stock Analysis

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Redfin

(NASDAQ:RDFN)

Rating:50Neutral
Price Target:
$10.00
▼(-2.53%Downside)
Redfin's overall stock score reflects substantial financial challenges and valuation concerns, with persistent losses and high leverage being significant risks. Technical analysis provides a neutral to slightly positive outlook, while the merger with Rocket Companies presents potential strategic benefits but comes with legal uncertainties.
Positive Factors
Acquisition
The adjustment reflects Rocket Companies' announced agreement to acquire Redfin for $12.50 per share in an all-equity deal, valuing Redfin's equity at approximately $1.75 billion.
Earnings
Redfin reported 1Q revenue and adjusted EBITDA ahead of expectations.
Strategic Partnerships
Redfin will receive a guaranteed minimum payment of $75 million from Zillow for the first 12 months of lead generation services.
Negative Factors
Financial Performance
Redfin recorded an $18.9 million restructuring and reorganization expense during the quarter and expects additional restructuring costs in the next quarter.
Market Concerns
Redfin shares are currently trading at approximately 12% discount to the proposed acquisition price, reflecting concerns about regulatory scrutiny.
Profitability
Redfin's adjusted EBITDA loss was driven by Rentals and RE Services margins coming in below expectations.

Redfin (RDFN) vs. SPDR S&P 500 ETF (SPY)

Redfin Business Overview & Revenue Model

Company DescriptionRedfin Corporation (RDFN) is a technology-powered real estate brokerage that operates in the United States and Canada. It provides a range of real estate services, including home buying, selling, and rentals. Redfin leverages its proprietary software and technology to offer a customer-centric approach, featuring tools for online home search, virtual tours, and personalized service from Redfin agents. The company also provides ancillary services such as mortgage, title, and closing services to enhance the real estate transaction experience.
How the Company Makes MoneyRedfin makes money primarily through commissions earned on real estate transactions facilitated by its agents. When a property is bought or sold through Redfin, the company receives a percentage of the sale price as a commission. Redfin charges a lower commission fee compared to traditional brokerages, which is part of its value proposition. Additionally, Redfin generates revenue from its ancillary services, including mortgage origination, title services, and closing services, which complement its core real estate brokerage operations. The company also makes money through advertising partnerships and fees associated with its rental marketplace. These diverse revenue streams are supported by Redfin's advanced technology platform, which enhances customer engagement and operational efficiency.

Redfin Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q4-2024)
|
% Change Since: 12.75%|
Next Earnings Date:Jul 31, 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.
Q4-2024 Updates
Positive Updates
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.
Negative Updates
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 Financial Statement Overview

Summary
Redfin faces significant financial challenges, with persistent losses and negative equity indicating a stressed financial position. Despite some improvements in cash flow generation, the company struggles with profitability and high leverage, posing substantial risks. Sustainability of operations and financial health improvement are critical areas of focus moving forward.
Income Statement
35
Negative
The income statement reflects a challenging situation for Redfin, with declining revenue and persistent losses. Gross Profit Margin stands at 35.05% for TTM, indicating some efficiency in managing direct costs. However, the Net Profit Margin is negative, reflecting ongoing losses. Revenue growth has been declining, with a significant drop year-over-year from 2021 to 2022 and slight recovery thereafter, which poses a concern for sustainable growth. EBIT and EBITDA margins are negative, highlighting operational inefficiencies.
Balance Sheet
25
Negative
The balance sheet reveals a strained financial position with negative stockholders' equity in the TTM, indicating liabilities exceed assets. The Debt-to-Equity ratio is not meaningful due to negative equity, pointing to high leverage and potential risk. Return on Equity is negative, reflecting the company's inability to generate profits from shareholders' investments. The equity ratio is also negative, further emphasizing the financial instability.
Cash Flow
40
Negative
Cash flow analysis shows some positive aspects, with the TTM operating cash flow being positive, indicating an ability to generate cash from operations. Free Cash Flow has improved from negative in prior years to positive in the TTM, which is a positive sign. However, the Free Cash Flow to Net Income ratio is negative due to the negative net income, reflecting ongoing profitability challenges.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.04B1.04B976.67M2.28B1.92B886.09M
Gross Profit
364.02M364.20M329.82M286.05M403.82M232.11M
EBIT
-170.18M-155.25M-210.12M-322.86M-109.95M792.00K
EBITDA
-129.82M-106.80M-53.04M-175.89M-42.93M21.87M
Net Income Common Stockholders
-190.55M-164.80M-130.03M-321.14M-109.61M-36.12M
Balance SheetCash, Cash Equivalents and Short-Term Investments
183.54M124.74M191.71M362.10M624.74M1.06B
Total Assets
1.08B1.01B1.15B1.57B2.02B1.36B
Total Debt
1.02B994.90M1.01B1.35B1.54B635.04M
Net Debt
833.69M870.15M860.05M1.11B949.38M-290.24M
Total Liabilities
1.23B1.10B1.11B1.47B1.67B730.14M
Stockholders Equity
-157.99M-82.67M42.71M103.87M349.72M630.38M
Cash FlowFree Cash Flow
40.67M-43.52M44.70M18.96M-329.06M46.58M
Operating Cash Flow
51.55M-32.31M56.76M40.49M-301.57M61.27M
Investing Cash Flow
-10.88M34.41M97.48M-184.34M-576.31M-57.12M
Financing Cash Flow
34.64M-28.11M-245.41M-332.09M650.34M694.23M

Redfin Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.26
Price Trends
50DMA
9.47
Positive
100DMA
9.08
Positive
200DMA
9.55
Positive
Market Momentum
MACD
0.17
Positive
RSI
57.88
Neutral
STOCH
52.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDFN, the sentiment is Positive. The current price of 10.26 is above the 20-day moving average (MA) of 10.01, above the 50-day MA of 9.47, and above the 200-day MA of 9.55, indicating a bullish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 57.88 is Neutral, neither overbought nor oversold. The STOCH value of 52.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
70
Outperform
$876.35M-52.95%83.50%8.45%
67
Neutral
$1.38B-6.44%2.23%6.69%-137.52%
65
Neutral
$2.16B29.815.32%1.05%13.87%90.42%
61
Neutral
$2.85B10.960.41%8438.88%5.73%-21.25%
58
Neutral
$437.16M-6.84%2.47%-74.15%
50
Neutral
$1.28B199.35%5.11%-29.67%
44
Neutral
$495.50M-47.67%2.36%-23.60%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RDFN
Redfin
10.26
4.02
64.42%
HOUS
Anywhere Real Estate ate
3.91
0.50
14.66%
EXPI
eXp World Holdings
9.23
-1.16
-11.16%
NMRK
Newmark Group
11.72
1.74
17.43%
OPEN
Opendoor Technologies
0.60
-1.53
-71.83%
REAX
Real Brokerage
4.25
-0.04
-0.93%

Redfin Corporate Events

M&A TransactionsShareholder Meetings
Redfin Stockholders Approve Merger with Rocket Companies
Neutral
Jun 5, 2025

On June 4, 2025, Redfin Corporation held a special meeting of stockholders to vote on two proposals related to a merger with Rocket Companies, Inc. The Merger Proposal and the Compensation Proposal were both approved, paving the way for Redfin to become a wholly owned subsidiary of Rocket. The merger is expected to close on or before July 1, 2025, following the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the satisfaction of remaining conditions.

The most recent analyst rating on (RDFN) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Redfin stock, see the RDFN Stock Forecast page.

M&A TransactionsLegal ProceedingsRegulatory Filings and Compliance
Redfin Faces Lawsuits Over Merger Proxy Statement
Negative
May 29, 2025

On May 5, 2025, Redfin Corporation filed a Definitive Proxy Statement with the SEC regarding a merger agreement with Rocket Companies, Inc. The merger proposal will be voted on by Redfin stockholders on June 4, 2025. Several lawsuits have been filed by Redfin stockholders alleging that the proxy statement is misleading and incomplete. Redfin denies these allegations but has issued supplemental disclosures to address the claims and avoid delays in the merger process. The company intends to defend against these lawsuits, which it considers without merit, and believes no additional disclosures are legally necessary.

The most recent analyst rating on (RDFN) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Redfin stock, see the RDFN Stock Forecast page.

M&A Transactions
Redfin Merger with Rocket Companies Advances
Neutral
May 9, 2025

On March 9, 2025, Redfin Corporation entered into a Merger Agreement with Rocket Companies, Inc. and Neptune Merger Sub, Inc., where Redfin will merge with Neptune Merger Sub and become a wholly owned subsidiary of Rocket. The expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period on May 8, 2025, marked a significant step towards closing the merger, which is anticipated to be finalized in the second or third quarter of 2025, pending shareholder approval and other conditions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.