National Bank of Canada Maintains Sector Perform on Real Matters, Raises Price Target to $7.50
National Bank of Canada on Friday raised maintained its sector-perform rating on the shares of Real Matters (REAL.TO) while raising its price target to $7.50 from $7.00 after the company swung to consolidated net income in its fiscal second quarter.The analysts said the company continues to add clients in its U.S. Title business, many of them coming from its large U.S. Appraisals customer base. The company added four clients in FQ2, including one of the largest non-bank servicers, and after the quarter ended, it signed a third Tier 1 lender and another top-100 lender.This momentum drove strong growth, with net revenue rising 176% year-over-year to $3.3 million, while adjusted EBITDA improved to -$0.4 million from -$2.1 million a year earlier. Although the Title segment currently makes up about 25% of total net revenue, it has the potential to scale to the size of the Appraisals business, the analysts added."All in, we think the FQ2 results were solid and reflect the company's execution to scale its U.S. Title business while increasing market share (across Appraisal and Title) and surfacing operating leverage. That said, the uncertain rate environment continues to lend to a balanced risk-to-reward profile," the analysts said.
