Anywhere Real Estate (NYSE:HOUS) misses fourth-quarter sales target
Residential real estate services company Anywhere Real Estate (NYSE: HOUS) reported fourth-quarter 2023 sales that were below analysts' expectations, with sales down 5.5% year-over-year to $1.25 billion. On a GAAP basis, the loss was $0.97 per share, an improvement from the loss of $4.13 per share in the prior-year period.
Is now the time to buy Anywhere Real Estate? Read the original article on StockStory to find out.
Anywhere Real Estate (HOUS) Q4 2023 Highlights:
- Revenue: $1.25 billion vs. analyst estimate $1.28 billion (2.1% margin of error)
- EPS: -$0.97, analyst estimate -$0.39 (-$0.58 surprise)
- free cash flow Revenue was -$13 million, down from $95 million in the previous quarter.
- Gross profit (GAAP): 35%, same level as same period last year
- Market capitalization: $844.1 million
“Anywhere demonstrated the strength of our leadership in 2023, delivering meaningful results in a challenging real estate market,” said Anywhere President and CEO Ryan Schneider.
Anywhere Real Estate (NYSE:HOUS), formerly known as Realogy Holdings, is a residential real estate company with a network of brokerage, franchise and payment services.
Therefore, real estate services technology has become a double-edged sword in real estate services. On the other hand, Internet listings are effective in disseminating information far and wide, casting a wide net for buyers and sellers, and increasing transaction opportunities. On the other hand, the digitalization of the real estate market may disintermediate key players such as agents who exploit information asymmetries to their advantage.
Sales Growth A company's long-term performance can indicate the quality of its business. While any company can experience temporary success, best-in-class companies maintain growth over many years. Anywhere Real Estate's revenue has declined over the past five years, decreasing by 1.3% per year. Within the consumer's discretion, a long-term historical perspective may overlook successful new products or companies riding on new trends. Therefore, we also track short-term performance. A look at Anywhere Real Estate's recent history shows that its revenue has declined by 16% per annum over the last two years, indicating demand is declining further.
For the quarter, Anywhere Real Estate missed Wall Street expectations, reporting a less-than-inspiring 5.5% year-over-year sales decline and generating $1.25 billion in revenue. Looking ahead, Wall Street expects sales to rise 6.1% over the next 12 months, faster than this quarter.
Cash is king. If you've been following StockStory for a while, you know that we focus on free cash flow. Why do you ask? We believe that ultimately cash is most important and accounting profits cannot be used to pay bills.
For the past two years, Anywhere Real Estate has broken even from a free cash flow perspective, which is below par for a consumer free business.
Anywhere Real Estate burned through $13 million in cash in the fourth quarter. This equated to a -1% margin and was an increase of 75.5% year-on-year.
Key Takeaways from Anywhere Real Estate's Q4 Results I'm hard-pressed to find many strong positives from these results. The company beat analysts' expectations on all key operating metrics (sales, EBITDA, EPS, and free cash flow). Additionally, the company noted that it expects sales volumes in the first quarter of 2024 to be historically low, resulting in negative EBITDA. For the remainder of 2024, we expect normal seasonal shipment volumes to increase further. Overall, it was a mixed quarter for Anywhere Real Estate. Shares of the company fell 1% on the earnings call and are currently trading at $7.57 per share.
