Shares of Real Matters, a Canadian technology company operating in the mortgage lending and insurance industries, have experienced a significant decline following the release of their first-quarter financial results. The company reported a loss and lower-than-expected revenue, primarily due to weak mortgage origination volumes.
At 11:00 a.m. ET, shares were trading over 10% lower at 6.28 Canadian dollars (US$4.67).
Lower Revenue and Loss in Q1
Real Matters reported net revenue of US$9.7 million, slightly down from US$9.8 million in the same period last year. This figure fell short of analyst expectations, which predicted US$10.2 million in revenue. The company also recorded a loss of US$3.6 million or 5 U.S. cents per share, compared to a loss of US$4.6 million or 6 U.S. cents per share in the previous year.
Market Challenges and Optimism for Recovery
Despite the decline in revenues, Chief Executive Officer Brian Lang emphasized that Real Matters remains optimistic about improving its financial performance as the market recovers. Lang stated that the company's focus is on positioning the business to scale when market conditions improve.
TD Cowen analyst Daniel Chan believes that the worst for Real Matters may be over. He suggests that the setup for the year is improving and points to industry analyst forecasts that predict a market recovery in the latter part of this year. Additionally, there is hope that refinance volumes could improve in the second half, with 15% of the refinance pool at 6% rates.
Chan added that Real Matters continues to execute well and is well-positioned for the market recovery.
In conclusion, while Real Matters faced challenges in the first quarter, they remain optimistic about future performance as market conditions improve and continue to position themselves for success.