Redfin Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Redfin Corporation (NASDAQ:RDFN) just released its third-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 6.3% to hit US$235m. Redfin also reported a statutory profit of US$0.30, which was an impressive 46% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Redfin
Taking into account the latest results, the most recent consensus for Redfin from 16 analysts is for revenues of US$1.17b in 2021 which, if met, would be a sizeable 34% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to US$0.14. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.13b and losses of US$0.26 per share in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a loss per share in particular.
It will come as no surprise to learn thatthe analysts have increased their price target for Redfin 6.1% to US$47.13on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Redfin analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$24.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 34%, in line with its 32% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% next year. So although Redfin is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Redfin going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Redfin has 1 warning sign we think you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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