RE/MAX Misses Q4 Revenue Estimates, Guides Lower

Key Financials:

* Q4 CY2024 Revenue: $72.47 million (-5.4% YoY, 2.7% miss)
* Adjusted EPS: $0.30 (4.8% EPS beat)
* Adjusted EBITDA: $23.34 million (3% beat)
* Operating Margin: 5.9% (up from -12.7% YoY)
* Free Cash Flow Margin: 22.1% (up from 8.4% YoY)

Guidance:

* FY 2025 Revenue Guidance: $300 million (3.5% miss)
* FY 2025 EBITDA Guidance: $95 million (below estimates)

Business Overview:

RE/MAX, a real estate franchise network, operates in over 100 countries. While technology has brought efficiency to the industry, it may also threaten traditional agents' roles.

Performance Analysis:

* Despite revenue growth in the past, RE/MAX's 1.7% annualized revenue growth over the last five years is weak.
* The company's revenue has declined by 6.7% annually over the past two years.
* Agent count has remained flat, indicating declining monetization.

Recent Results:

* Q4 revenue missed estimates and declined 5.4% YoY.
* Company guidance for next quarter indicates a 6.1% YoY sales decline.
* Analysts expect 1.5% revenue growth over the next 12 months.

Cash Flow:

* RE/MAX has decent cash profitability, with a free cash flow margin of 11.8% over the last two years.
* Q4 free cash flow margin reached 22.1%, up 13.6 percentage points YoY.
* Analysts predict a decline in free cash flow margin over the next year.

Key Takeaways:

* While EPS and EBITDA beat estimates, revenue guidance disappointed.
* Overall, a weaker quarter for RE/MAX.
* Investors should consider long-term fundamentals and valuation before making investment decisions.

Analyst Recommendation:

Read our full research report for an in-depth analysis of RE/MAX's financial performance and investment potential. [Click here for full report]