Yahoo Finance RE/MAX Holdings, Inc. (NYSE:RMAX) Just Reported, And Analysts Assigned A US$9.00 Price Target
It's been a good week for RE/MAX Holdings, Inc. (NYSE:RMAX) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.2% to US$7.71. It was a pretty bad result overall; while revenues were in line with expectations at US$78m, statutory losses exploded to US$0.18 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for RE/MAX Holdings
Taking into account the latest results, the seven analysts covering RE/MAX Holdings provided consensus estimates of US$309.3m revenue in 2024, which would reflect a discernible 2.9% decline over the past 12 months. RE/MAX Holdings is also expected to turn profitable, with statutory earnings of US$0.13 per share. In the lead-up to this report, the analysts had been modelling revenues of US$310.4m and earnings per share (EPS) of US$0.31 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The average price target fell 12% to US$9.00, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on RE/MAX Holdings, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$7.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.9% by the end of 2024. This indicates a significant reduction from annual growth of 7.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that RE/MAX Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for RE/MAX Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that RE/MAX Holdings' revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for RE/MAX Holdings going out to 2026, and you can see them free on our platform here.
Even so, be aware that RE/MAX Holdings is showing 4 warning signs in our investment analysis , and 2 of those can't be ignored...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
