NASDAQ:RDFN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Redfin Corporation operates as a real estate brokerage company in the United States and Canada. With the latest financial year loss of US$80.8m and a trailing-twelve-month loss of US$69.0m, the US$4.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Redfin’s path to profitability – when will it breakeven? We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.” data-reactid=”28″>Redfin Corporation (NASDAQ:RDFN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Redfin Corporation operates as a real estate brokerage company in the United States and Canada. With the latest financial year loss of US$80.8m and a trailing-twelve-month loss of US$69.0m, the US$4.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Redfin’s path to profitability – when will it breakeven? We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Redfin ” data-reactid=”29″> View our latest analysis for Redfin
According to the 16 industry analysts covering Redfin, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$48m in 2023. Therefore, the company is expected to breakeven roughly 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 57%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Redfin’s growth isn’t the focus of this broad overview, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Redfin currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Redfin’s case is 43%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
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Redfin’s company page on Simply Wall St. We’ve also compiled a list of pertinent aspects you should further examine:” data-reactid=”50″>This article is not intended to be a comprehensive analysis on Redfin, so if you are interested in understanding the company at a deeper level, take a look at Redfin’s company page on Simply Wall St. We’ve also compiled a list of pertinent aspects you should further examine:
- Historical Track Record: What has Redfin’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Redfin’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”55″>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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