Real Matters Inc. (REAL:TSX) Analysts respond to earnings beat

Real Matters Inc. Stock Forecast:

The average target price for Real Matters Inc, as determined by 6 analyst forecasts, is CAD 4.96 over the next 12 months. The average analyst rating is “Buy.” Stock Target Advisor‘s analysis of Real Matters Inc is “Slightly Bearish” based on 3 positive and 5 negative signals. Real Matters Inc’s current stock price is CAD 4.88, and has increased by 14.55% in the past week, 19.90% in the past month, but decreased by 12.54% over the last year.

REAL:TSX Earnings News:

In the first quarter of 2023 and the corresponding quarters in 2022 the company saw a 34.4% decrease in revenue from Q4 2022 to Q1 2023, and a 64.6% decrease from Q1 2022 to Q1 2023.

Net revenue decreased by 31.9% from Q4 2022 to Q1 2023, and 65.9% from Q1 2022 to Q1 2023.

Adjusted EBITDA saw a 163.6% decrease from Q4 2022 to Q1 2023, and 149.7% decrease from Q1 2022 to Q1 2023.

The net loss income decreased by 53.7% from Q4 2022 to Q1 2023, but increased by 275.2% from Q1 2022 to Q1 2023.

The U.S. Appraisal segment saw a decrease in revenue of 35.5% from Q4 2022 to Q1 2023 and 64.4% from Q1 2022 to Q1 2023.

The Canadian division saw a decrease in revenue of 42.3% from Q4 2022 to Q1 2023 and 85.4% from Q1 2022 to Q1 2023.

Analysts Coverage Change:

STA Research maintains a Hold rating for Real Matters Inc. with a target price of $4.50 on the company’s stock.

ATB Capital Markets maintains an Outperform rating and lowers the target price to $8.50.

Positive Fundamentals:

Real Matters Inc. stock is a highly attractive investment option due to its strong financial performance, as indicated by its positive cash flow, superior earnings growth, and high Gross Profit to Asset Ratio.

Positive cash flow is a critical metric for any company, as it indicates the company’s ability to generate cash from its operations. Real Matters has demonstrated this strength by consistently delivering positive cash flow over the past four quarters.

Additionally, the company’s earnings growth has outperformed its sector in the last 5 years, positioning itself in the top quartile. This strong earnings growth is a clear indicator of the company’s ability to grow and generate revenue.

Lastly, the high Gross Profit to Asset Ratio highlights Real Matters’ efficiency in generating profits from its assets. This ratio is a popular measure among value investors and is seen as a key indicator of long-term returns.

In conclusion, Real Matters Inc. stock has multiple financial strengths that make it an attractive investment option for those seeking a company with solid financial performance and growth potential.

Negative Fundamentals:

Real Matters Inc. stock has several potential drawbacks to consider. Firstly, it has a low market capitalization, which makes it less stable and more susceptible to market changes compared to larger entities in its sector. Additionally, the stock has shown high volatility in terms of total returns, so it may not be suitable for investors who are risk-averse. Furthermore, the stock is overpriced compared to its peers on a price to cash flow basis and has negative total free cash flow in the most recent four quarters. Lastly, the company has shown below median revenue growth in the previous 5 years compared to its sector. These factors should be taken into consideration before investing in Real Matters Inc. stock.

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