Technology-focused real estate brokerage company Redfin Corporation (NASDAQ:RDFN) recently revealed that it has entered into a definitive agreement to acquire Bay Equity Home Loans, a full-service mortgage lending company, for $135 million. The deal is expected to close in the second quarter of 2022.
Following the news, shares of the company declined marginally to close at $34 in Tuesday’s extended trading session.
The acquisition of Bay Equity has been made by Redfin with the intention to become a one-stop shop for brokerage, lending and other services related to real estate.
With Bay Equity’s expertise in loan origination, Redfin will be able to provide loans to its customers at lower interest rates. Further, with this move, the company’s investment costs in new lending software will also be reduced.
The President of Real Estate Operations at Redfin, Adam Wiener, said, “With Bay Equity’s geographic presence and full product suite, we’ll be able to offer mortgages to a larger share of Redfin’s home-buying customers right away, including jumbo loans and loans for veterans and folks with lower credit scores.”
On January 11, Piper Sandler analyst Thomas Champion reiterated a Buy rating on the stock with a price target of $70, which implies upside potential of 104.7% from current levels.
Wall Street’s Top Analysts have awarded Redfin a Hold consensus rating based on 3 Buys, 6 Holds and 1 Sell. The average Redfin price target of $56.88 implies upside potential of 66.3% from current levels. Shares have declined 57.7% over the past year.
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