What Happened?
Shares of real estate franchise company RE/MAX (NYSE:RMAX) fell 15.5% in the afternoon session after the company reported weak third-quarter earnings. Sales declined during the quarter due to a decrease in agent count and a reduction in revenue from previous acquisitions. In addition, revenue forecast for the next quarter was underwhelming, coming in below Wall Street's estimates. Overall, this was a weaker quarter for the company.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RE/MAX? Access our full analysis report here, it’s free.
What The Market Is Telling Us
RE/MAX’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. But moves this big are rare even for RE/MAX and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 15.2% on the news that the company reported second-quarter earnings results. RE/MAX exceeded analysts' EPS expectations. The company also maintained its full year revenue guidance, which is comforting. Zooming out, we think this was a fine quarter featuring some areas of strength.
RE/MAX is down 14% since the beginning of the year, and at $10.87 per share, it is trading 18.6% below its 52-week high of $13.35 from December 2023. Investors who bought $1,000 worth of RE/MAX’s shares 5 years ago would now be looking at an investment worth $294.03.
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