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Key Factors to Impact Redfin (RDFN) This Earnings Season

Redfin Corporation RDFN is scheduled to report first-quarter 2021 results on May 5, after the bell. The company’s quarterly results will likely display year-over-year increases in revenues.

In the last reported quarter, this technology-powered residential real estate company reported net earnings per share of 11 cents. The results compare favorably with the Zacks Consensus Estimate of earnings per share of 5 cents.

Over the preceding four quarters, the company surpassed estimates on each occasion, the average beat being 54.75%. The graph below depicts this surprise history:

Redfin Corporation Price and EPS Surprise

Redfin Corporation price-eps-surprise | Redfin Corporation Quote

Let’s see how things have shaped up prior to the first-quarter earnings release.

Factors at Play

Redfin is poised to benefit from its wide offerings in the real estate industry, including brokerage, iBuying, mortgage, and title services. Its real estate search site offers a number of online tools to consumers. Redfin is likely to benefit from the faster pace of increase in online visits and customer inquiries amid rising levels of home-buyer interest.

Per the company’s first-quarter 2021 outlook that was released on Feb 24, 2021, total revenues are projected at $249-$255 million, calling for a year-over-year increase of 30-34%. Properties segment is estimated to account for $77-$80 million of the total revenues, suggesting a 3% year-over-year decrease to a 1% year-over-year increase.

Further, net loss is expected to be $39-$36 million, as against the net loss of $60 million incurred in first-quarter 2020.

The Zacks Consensus Estimate for the March-end quarter revenues is currently pegged at $253.68 million, suggesting a year-over-year increase of 32.8%. The consensus mark for gross profit from real estate services is pinned at $33.34 million compared with the year-ago period’s $15.07 million.

Average number of lead agents of 2,447 reflects an increase from the 1,826 witnessed in the comparable period last year.

Redfin’s activities during the first quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for first-quarter loss per share is currently pinned at 33 cents. However, it is narrower than the year-ago quarter’s net loss per share of 64 cents.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict an earnings surprise for Redfin this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Redfin currently carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%.

Stocks to Consider

Here are a few stocks in the broader real estate sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:

LGI Homes, Inc. LGIH, scheduled to announce quarterly results on May 4, has an Earnings ESP of +22.53% and carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The RMR Group Inc. RMR, slated to release earnings figures on May 7, has an Earnings ESP of +2.06% and holds a Zacks Rank of 3, currently.

National Storage Affiliates Trust NSA, set to report first-quarter numbers on May 4, has an Earnings ESP of +1.84% and carries a Zacks Rank of 3, currently.

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LGI Homes, Inc. (LGIH): Free Stock Analysis Report
 
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The RMR Group Inc. (RMR): Free Stock Analysis Report
 
Redfin Corporation (RDFN): Free Stock Analysis Report
 
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