Head-To-Head Review: Redfin (RDFN) vs. Marcus & Millichap (MMI)

Redfin (NYSE: MMI) and Marcus & Millichap (NYSE:MMI) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Institutional & Insider Ownership

74.8% of Redfin shares are owned by institutional investors. Comparatively, 47.1% of Marcus & Millichap shares are owned by institutional investors. 8.8% of Redfin shares are owned by company insiders. Comparatively, 50.1% of Marcus & Millichap shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.



Profitability

This table compares Redfin and Marcus & Millichap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Redfin -15.12% -10.83% -8.60%
Marcus & Millichap 8.44% 23.79% 17.27%

Earnings & Valuation

This table compares Redfin and Marcus & Millichap’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Redfin $370.04 million 4.07 -$15.00 million ($0.20) -90.85
Marcus & Millichap $719.70 million 2.02 $51.52 million $1.62 23.28

Marcus & Millichap has higher revenue and earnings than Redfin. Redfin is trading at a lower price-to-earnings ratio than Marcus & Millichap, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Redfin and Marcus & Millichap, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Redfin 2 4 7 0 2.38
Marcus & Millichap 0 2 2 0 2.50

Redfin presently has a consensus target price of $25.18, indicating a potential upside of 38.59%. Marcus & Millichap has a consensus target price of $41.50, indicating a potential upside of 10.05%. Given Redfin’s higher probable upside, equities research analysts clearly believe Redfin is more favorable than Marcus & Millichap.

Summary

Marcus & Millichap beats Redfin on 9 of the 13 factors compared between the two stocks.

About Redfin

Redfin Corporation operates as a real estate brokerage company in the United States. The company operates an online real estate marketplace and provides real estate services, such as assisting individuals to purchase or sell their residential property. It also provides title and settlement services; originates and sells mortgages; and buys and sells residential properties. The company was formerly known as Appliance Computing Inc. and changed its name to Redfin Corporation in May 2006. Redfin Corporation was incorporated in 2002 and is headquartered in Seattle, Washington.

About Marcus & Millichap

Marcus & Millichap, Inc., a brokerage firm, provides investment brokerage and financing services to sellers and buyers of commercial real estate in the United States and Canada. The company offers commercial real estate investment sales, financing, research, and advisory services for multifamily, retail, office, and industrial properties, as well as hospitality, self-storage, seniors housing, land, and manufactured housing properties. It also operates as a broker of debt financing for commercial properties. In addition, the company provides various ancillary services, including research, and advisory and consulting services to developers, lenders, owners, real estate investment trusts, high net worth individuals, pension fund advisors, and other institutions. Marcus & Millichap, Inc. was founded in 1971 and is headquartered in Calabasas, California.

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