It’s been an interesting few days for Redfin – a company that offers real estate brokerage services.
Yesterday, the firm released a haunting notice that 13% of its workforce would be laid off amidst a slow housing market. The company has decided to pull the plug on their iBuyer program – RedfinNow, a segment that aimed to accelerate and digitally transform the home buying/selling process.
All of this came after the 2nd quarter when the company laid off 8% of its workforce. This is a sign that the housing market has gone from bad to worse. Not only are looming recession fears discouraging potential buyers from making offers. But, the nearly 7% mortgage rates are the highest in the past 20 years.
And while we’re here talking specifically about Redfin, they are not the only company feeling the effects of the economic downturn on the horizon. Companies like Zillow and Opendoor have also laid off large portions of their respective workforces in the past year, too.
CEO Glenn Kelman estimates that the RedfinNow segment will likely result in as high as a $26MM loss in 2022. In the third quarter, the company lost $0.83/share and missed revenue estimates by $4MM.
This news resulted in shares sliding almost 15% lower than they opened at – strengthening an already negative price trend. But so far today, the stock has rebounded and more than recovered the losses from yesterday. As of 12 pm EST, RDFN stock sits at a price of $4.67/share – a 42% gain.
This begs the question – why is Redfin rallying despite what many view as negative news? There doesn’t look to be any answer one can point to as a logical explanation.
It’s possible that speculative investors see good long-term value in Redfin – and viewed yesterday’s price as the bottom. And, looking at the end of Kelman’s release yesterday, there is reason to be optimistic about the big picture for Redfin. He states that the company is going to get back to what they do well – without the distraction of RedfinNow.
All this considered, you want to know what your next move with RDFN stock should be. And, we can tell you – just take a look below through the VectorVest stock forecasting software.
3 Things Redfin Investors Need to See Before Their Next Move
The VectorVest system changes the way you find and vet opportunities in the stock market forever. Stock analysis is about to get a whole lot easier for you. You can learn everything you need to know about a stock based on just three simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).
Gaining insights from these three ratings is effortless. They sit on a simple scale of 0.00-2.00 – with 1.00 being the average. Anything over 1.00 indicates overperformance and vice versa. But here’s the real kicker: based on these three ratings, VectorVest can provide you with a clear buy, sell, or hold recommendation. You’ll never have to play the guessing game or let emotion influence your decisions again. As for Redfin, here’s the current situation:
- Very Poor Upside Potential: the RV rating is an indicator of a stock’s long-term price appreciation potential, projected 3 years out. And right now, the RV rating of 0.36 is very poor for RDFN. Moreover, the stock is overvalued. VectorVest calculates the current value to be just $1.45 compared to a current price of $4.70.
- Poor Safety: taking a look at the risk factors of a stock, the RS rating analyzes a company’s financial consistency and predictability, debt-to-equity ratio, and business longevity. As for RDFN, the RS rating of 0.50 is poor.
- Very Poor Timing: Despite the huge pump RDFN stock is showing today, the RT rating of 0.33 is very poor. This rating looks at a price trend’s direction, dynamics, and magnitude. It takes insights day over day, week over week, quarter over quarter, and year over year.
All of this works out to a very poor overall VST rating of just 0.40. Does that mean it’s time to sell any RDFN shares you have remaining? Or is there still hope that this could be a turning point – as RDFN sits 91% lower than it did a year ago? For a clear answer on your next move, analyze the stock free at VectorVest!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for RDFN, it has very poor upside potential and timing, with poor safety.
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