Oppenheimer upgrades Redfin to Perform on valuation

As previously reported, Oppenheimer analyst Jason Helfstein upgraded Redfin to Perform from Underperform on valuation and removed the firm’s $10 price target. Oppenheimer believes the shares are fairly valued at their current 26% discount to peers on 2024 gross profit. The stock has declined 43% from its 52-week high of $17.68 versus the 2% decline in the NASDAQ in that period, the firm notes, adding that Redfin is now trading at 3.4-times 2024 gross profit versus peers’ average of 4.7-times. Further, Oppenheimer thinks the discount properly reflects uncertainty around the company’s fixed-cost agent “employee” model” versus the “commission” model used by the industry at large and the ability to monetize leads through other products. The firm has repeatedly written that positioning agents as full-time employees leaves Redfin with too many agents in a downturn and not enough agents to gain share when the housing market improves.