Is Realogy stock undervalued? A look from a fundamental perspective

Realogy $RLGY is a very undervalued stock that is worth a look. With strong cash flow profiles in every business it owns and the corporate tax cuts Realogy stock should be in $32 a share range and now is only $22.73 ad of yesterday.

Austin, United States – July 2, 2018 /PressCable/ —

Realogy stock sitting at 52 week low $22.73 a share is grossly undervalued. The are some real challenges the industry as a whole has which we will look at later first let’s look at the opportunity

Realogy $RLGY us projecting 550 million in free cash flow a year that is after paying the 170 million in interest to service debt. EBITDA will be around 720 million this year. Realogy owns the most well known real estate brokerage Coldwell Banker. In my opinion Coldwell Banker franchise is worth more than the whole Realogy market cap.

https://finance.yahoo.com/news/realogy-holdings-corp-nyse-rlgy-153030866.html

Realogy fair value stock is $36 a share most likely more just being conservative. Realogy owns 17% market share in real estate brokerage sales. Realogy is very unique they own multiple real estate brokerages that they franchise out for royalties and they own standalone brokerages that they own bringing in the lion den of there cash flow.

They also have profitable companies they own that provide real estate leads to the real estate agent’s and other tools to help them. Additionally they own a relocation and mortgage/title company that is profitable. One of wall street’s best concentrated value investors bought 6% of Realogy at about $26 a share.

Realogy is currently very shareholder friendly with stock buybacks. New CEO of Realogy Ryan Schneider is doing an excellent job of changing leadership position in areas of Realogy that can improve or has been lagging. Being the stock is so undervalued makes Realogy a perfect target of a take over or buyout offer from private equity companies. Realogy was taken public by private equity in 2012 at $27 a share when the company had far less cash flow and had more debt. Company now is in far better shape and selling at a much lower price. If a buyout offer comes should be in the 32 -36.

Some reasons why the big sell off is because the feel of real estate being overpriced. Another factor is housing supply shortage fewer houses selling will at some point hurt real estate brokerages profits. With prices so high it’s becoming increasingly difficult to afford buying a home. It will be interesting to see how it plays out obvious big institutions taking no chances and are selling Realogy stock.

Contact Info:
Name: John Hogue
Organization: Solution Pest Control
Address: 8500 Bluffstone Cove Ste B200, Austin, Texas 78759, United States
Phone: +1-512-222-6330

Source: PressCable

Release ID: 368439