Why Redfin Shares Are Falling Today

Redfin Corp RDFN is trading lower Friday morning after the company reported fourth-quarter financial results and issued guidance for expanding losses. 

Redfin reported quarterly revenue of $643.1 million, which beat the $598.76 million estimate. The company reported an earnings loss of 27 cents per share, which beat the estimate for a loss of 31 cents per share. 

"Fourth-quarter revenues and net income exceeded our expectations," said Redfin CEO Glenn Kelman. "Entering an uncertain market, Redfin’s pricing power and on-demand service will let us take share and improve operating margins."

Redfin expects first-quarter revenue to be between $535 million and $560 million versus the estimate of $524.59 million. The company said it expects total net loss to be between $122 million and $115 million, compared to a net loss of $36 million in the first quarter of 2021.

Following Redfin's results, RBC Capital analyst Brad Erickson downgraded the stock from an Outperform rating to a Sector Perform rating and lowered the price target from $60 to $23.

Redfin is an internet-based real estate broker that pays its agents a salary opposed to the traditional model of splitting a percentage of total commission, allowing it to charge homesellers a smaller fee to list. 

See Also: 26 Stocks Moving in Friday's Pre-Market Session

RDFN Price Action: Redfin has traded as high as $98.44 over a 52-week period. It's making new 52-week lows Friday.

The stock was down 24% at $21.77 at time of publication. 

Photo: paulbr75 from Pixabay.