(Bloomberg) -- Redfin Corp. sinks to a fresh record low after an Oppenheimer analyst downgraded the stock and said the real estate company’s model is “fundamentally flawed.”
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Shares plunge as much as 18% on Monday to $3.32, as Oppenheimer’s Jason Helfstein cut his recommendation to underperform from a hold-equivalent rating. He sees room for further pain, slashing his price target to a Street-low $1.30.
“We believe that Redfin’s business is fundamentally flawed, as the company continues to use a fixed-cost model for agents,” the analyst writes. “This prevents the company from optimizing margins when the housing markets decline and limits share gains when markets rebound.” The company didn’t immediately respond to a request for comment.
Redfin has plunged more than 90% so far this year, as real estate technology firms have been slammed amid the housing market’s slowdown from rising mortgage rates.
Last week, Opendoor Technologies Inc. said it would lay-off about 18% of its headcount. The week before, Zillow Group Inc. cut about 5% of employees. Opendoor is falling as much as 13% on Monday, and Compass Inc. slides as much as 8.9%.
Redfin is expected to report earnings after the market’s close on Wednesday.
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