RE/MAX (RMAX) Misses Q1 Earnings and Revenue Estimates
RE / MAX (RMAX) posted quarterly earnings of $ 0.46 per share, missing the Zacks consensus estimate of $ 0.49 per share. This equates to earnings of $ 0.39 per share a year ago. These figures have been adjusted for one-off effects.
This quarterly report corresponds to a profit surprise of -6.12%. A quarter ago, this residential real estate broker franchisor was expected to make $ 0.44 per share when it actually made a profit of $ 0.47, which is a surprise of 6.82%.
In the past four quarters, the company has only exceeded EPS consensus estimates once.
RE / MAX, part of the Zacks Real Estate – Operations industry, had revenue of $ 72.3 million for the quarter ended March 2021, missing the Zacks consensus estimate by 3.27%. This corresponds to sales of USD 70.27 million in the previous year. The company has beaten consensus sales estimates twice in the past four quarters.
The sustainability of the stock’s immediate price movement based on recently released numbers and future earnings expectations will depend primarily on management comments on the earnings call.
The RE / MAX share has gained around 1.7% since the beginning of the year, while the S&P 500 gained 11%.
What’s next for RE / MAX?
While RE / MAX has underperformed the market so far this year, investors are wondering: what’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors fix this is the company’s earnings outlook. This includes not only the current consensus expectations for the quarters ahead, but also how those expectations have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in revisions of earnings estimates. Investors can keep track of such revisions themselves, or they can rely on a proven rating tool like Zacks Rank, which has an impressive track record of taking advantage of earnings estimate revisions.
The story goes on
Prior to this earnings release, the estimated revision trend for RE / MAX was unfavorable. While the extent and direction of the estimated revisions could change following the company’s just-released earnings report, the current status results in a Zacks rank 5 (strong sell) for the stock. Hence, the stocks are expected to underperform the market in the near future. The full list of today’s Zacks # 1 Rank (Strong Buy) stocks can be found here.
It will be interesting to see how the estimates for the coming quarters and the current fiscal year change in the coming days. The current EPS consensus estimate is $ 0.54 on revenue of $ 75.2 million for the next quarter and $ 2.14 on revenue of $ 304.43 million for the current fiscal year.
Investors should be aware that the outlook for the industry can also have a material impact on the performance of the stock. In terms of Zacks industry rankings, Real Estate – Operations is currently in the bottom 12% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.
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