What Happened?
Shares of real estate franchise company RE/MAX (NYSE: RMAX) fell 3.4% in the morning session after the company reported disappointing second-quarter financial results, including a revenue miss and a decline in its U.S. agent count, and subsequently lowered its full-year guidance.
The real estate giant's total revenue fell 7.3% year-over-year to $72.8 million, missing Wall Street's expectations. A significant factor in the downturn was a 7.0% drop in the number of U.S. agents, reflecting ongoing challenges in the domestic market. Looking ahead, RE/MAX revised its full-year 2025 revenue guidance downward to a range of $290 million to $296 million. The company also provided an underwhelming forecast for the upcoming quarter and its full-year adjusted EBITDA, both of which were below analyst estimates, signaling continued headwinds for the business.
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What Is The Market Telling Us
RE/MAX’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 15.5% on the news that 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.
RE/MAX is down 19.5% since the beginning of the year, and at $8.34 per share, it is trading 40.6% below its 52-week high of $14.04 from November 2024. Investors who bought $1,000 worth of RE/MAX’s shares 5 years ago would now be looking at an investment worth $250.98.
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