Redfin CEO Glenn Kelman at the 2018 GeekWire Summit. (Photo by Dan DeLong for GeekWire)
Redfin beat Wall Street expectations for revenue and profits in the third quarter, but its stock is falling in after-hours trading.
The tech-powered real estate brokerage reported net profits of $3.5 million — $0.04 per share — on $140.3 million in revenue, a 28 percent increase over a year ago. Analysts surveyed in advance expected Redfin to post earnings of $0.02 per share on $139.27 million in revenue.
If Redfin beat expectations, then why is the stock dropping? It appears the company took the wind out of investors sails with lower revenue targets next quarter.
In a statement, Redfin CEO Glenn Kelman lauded growth in the company’s market share of home sales. Redfin had a 0.85 percent market share at the end of the third quarter, which up from 0.71 percent a year ago.
“Redfin’s steady third-quarter market share gains reflect the enduring appeal of our low prices and personal service,” said Redfin CEO Glenn Kelman. “A housing-market correction always makes it harder to grow revenues, but our ability to do so in even challenging markets speaks to our business’s fundamental strength. We believe that our improved third-quarter growth in traffic, as well as increased engagement levels between agents and customers, sets us up for continued share growth. Our investments in software to make our agents more efficient — and to integrate all the paperwork and processes for buying and selling a home, getting a mortgage and transferring the title — should let us compete at a price and a scale few other brokerages can.”
Redfin’s Properties segment, which includes the direct home buying and selling operation Redfin Now, more than tripled over a year ago. In the third quarter, it brought in $11.3 million versus $3.3 million a year ago. …read more