Redfin slips as DA Davidson downgrades to "underperform"

Redfin

12/07/2023 14:06

** Redfin Corp's  RDFN.O  shares down 2.3% at $15.18
premarket as DA Davidson cuts rating on real estate broker to
"underperform" from "neutral", citing valuation
    ** Brokerage in note points to RDFN's stock up ~260% in 2023
and up ~47% over the past month, making co top performing name
in its broader property tech coverage "by a wide margin"
    ** RDFN over past few qtrs has made progress towards goal of
achieving sustainable profitability (largely via cost cuts in
its core brokerage and reorienting around higher-margin revenue
streams), but this is now fully reflected in stock's valuation,
DA Davidson says
    ** RDFN's listings share gains still lagging typical
seasonality, analysts say
    ** DA Davidson sticks with $10 PT, which implies 5.9x its
estimated 2023 EV/gross profit
    ** 13 of 17 analysts rate RDFN "hold", 3 rate "sell" and 1
has "strong sell", per Refinitiv data; median PT is $9
    ** RDFN's stock on Tues surged 23.9% after Piper Sandler
upgraded rival Zillow Group  ZG.O , saying already high mortgage
rates stabilizing at current levels, which should spur demand
for housing
    

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))