US$7.27: That's What Analysts Think Redfin Corporation (NASDAQ:RDFN) Is Worth After Its Latest Results

It's been a good week for Redfin Corporation (NASDAQ:RDFN) shareholders, because the company has just released its latest annual results, and the shares gained 4.6% to US$7.00. Revenues of US$977m fell short of estimates by 10%, but statutory losses were in line with expectations, at US$1.16 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Redfin after the latest results.

Check out our latest analysis for Redfin

After the latest results, the 14 analysts covering Redfin are now predicting revenues of US$1.05b in 2024. If met, this would reflect a reasonable 7.6% improvement in revenue compared to the last 12 months. Losses are forecast to balloon 29% to US$1.38 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.06b and losses of US$1.06 per share in 2024. So it's pretty clear the analysts have mixed opinions on Redfin even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 6.4% to US$7.27, with the analysts signalling that growing losses would be a definite concern. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Redfin analyst has a price target of US$10.50 per share, while the most pessimistic values it at US$4.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Redfin's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Redfin's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Redfin.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Redfin's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Redfin's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Redfin analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Redfin .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.