Redfin Corporation (NASDAQ: RDFN) and Gafisa SA (NYSE:GFA) are both small-cap real estate development & operations – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Redfin Corporation and Gafisa SA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Redfin Corporation 0 5 3 0 2.38
Gafisa SA 1 0 0 0 1.00

Redfin Corporation presently has a consensus target price of $26.86, indicating a potential upside of 17.02%. Given Redfin Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Redfin Corporation is more favorable than Gafisa SA.

Profitability

This table compares Redfin Corporation and Gafisa SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Redfin Corporation N/A N/A N/A
Gafisa SA -120.24% -25.46% -9.69%

Valuation and Earnings

This table compares Redfin Corporation and Gafisa SA’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Redfin Corporation $267.19 million 6.99 -$22.52 million N/A N/A
Gafisa SA $263.80 million 0.47 -$333.60 million ($28.71) -0.31

Redfin Corporation has higher revenue and earnings than Gafisa SA.

Insider & Institutional Ownership

1.0% of Redfin Corporation shares are held by institutional investors. Comparatively, 3.9% of Gafisa SA shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Redfin Corporation beats Gafisa SA on 9 of the 10 factors compared between the two stocks.

Redfin Corporation Company Profile

Redfin Corporation is engaged in providing residential real estate brokerage services. The customer can search for homes by neighborhood, city or MLS number, or can refine results using detailed parameters, such as price and number of beds or baths. The Company serves home buyers and sellers. The Company offers online tools to consumers, including Redfin Estimate, which is an automated home-valuation tool. The customer can search homes for sale in Austin, Atlanta, Baltimore, Boston, Charlotte, Chicago, Dallas, Denver, Fort Lauderdale, Houston, Lake Tahoe, Las Vegas, Los Angeles, Miami, Philadelphia, Phoenix, Portland, OR, Raleigh, San Antonio, San Diego, San Francisco, Sacramento, San Jose, Seattle and Washington. The Company serves over 80 metro areas across the United States.

Gafisa SA Company Profile

Gafisa S.A. is a diversified national homebuilder. The Company’s segments are Gafisa (for ventures targeted at high and medium income) and Tenda (for ventures targeted at low income). The Company’s brands include Tenda, which serves the affordable entry-level housing segments, Gafisa, which offers a range of residential options to the mid to higher income segments and Alphaville (equity method investment), which focuses on the identification, development and sale of residential communities. In addition, it provides construction services to third parties on certain developments in the Gafisa segment where it retains an equity interest. Its real estate business activities include developments for sale of residential units, land subdivisions and commercial buildings; construction services, and sale of units through its brokerage subsidiaries, Gafisa Vendas Intermediacao Imobiliaria Ltda and Gafisa Vendas in Rio de Janeiro, jointly referred to as Gafisa Vendas.

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