Stock Analysis & Ideas

Real Estate Boom Hasn’t Catapulted Realogy, Yet

Realogy (RLGY) is a brokerage and franchising company based in the United States that provides residential real estate services. It provides various brokerage, relocation, title, and settlement services.

Realogy stock has likewise not gotten so much love from the market lately. The company’s stock has dropped about 4% in the last year and is down 6% so far this year. RLGY’s latest strong earnings reports, on the other hand, have helped the company regain some traction.

Recent Results

Last month, Realogy announced outstanding fourth-quarter earnings, with both the top and bottom lines above expectations.

The business announced revenue of around $1.97 billion, which was better than the Street’s projection of $1.79 billion, driven by strength in the transaction and sales volumes, as well as market share gains. In addition, earnings of $0.39 per share beat the $0.32 average estimate.

The corporation had $343 million in net income in 2021. Realogy’s profitability reflected a significant improvement over its loss of $360 million in 2020. Regarding Realogy’s balance sheet figures, it generated $553 million in free cash flow in 2021 and lowered its net debt ratio to 2.4x.

What’s Ahead?

The company’s initiatives to lower the cost profile, promote top-line growth, and generate significant free cash flows should help it achieve new heights in 2022. Realogy’s attempts to engage in new strategic ventures should also aid the company’s market share gains in the housing sector.

Realogy’s CEO Ryan Schneider also sounded upbeat about the company’s future prospects on the Q4 results call. He writes, “2022 represents the start of Realogy’s next chapter, one we believe will be headlined by greater growth as we increasingly simplify and integrate the real estate transaction for consumers.”

Also, hedge funds have been accumulating RLGY shares. Per TipRanks’ Hedge Fund Trading Activity tool, hedge funds have added 953.7K RLGY shares in the last quarter.

Wall Street’s Take

On TipRanks, Realogy stock commands a Hold consensus rating based on one Buy and one Sell rating. As for price targets, the average RLGY stock price prediction of $20.50 implies almost a 28% upside potential from the current levels.

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