Real Matters (TSX:REAL) is a Toronto-based company that provides technology and network
management solutions to mortgage lending and insurance industries in Canada and the United States.
Its shares have plunged 33% in 2022 as of mid-afternoon trading on July 28. The Canadian and U.S. real
estate markets have been reeling this summer, erasing many of the gains won during the height of the
COVID-19 pandemic.
Shares of Real Matters are down 60% in the year-over-year period. The company released its third
quarter 2022 results on Thursday, July 28. Real Matters estimated that the U.S. mortgage origination
market was down 50% in the year-over-year period in Q3 2022. Meanwhile, interest rate hikes have led
to a 76% decline in refinance rates.
On the operational side, Real Matters launched two new lenders in U.S. Appraisal and two new lenders
in U.S. Title. In the year-to-date period, the company has launched nine new lenders and one new
channel with one lender in U.S. Appraisal. Moreover, it has launched four new lenders in total in U.S.
Title. Poor overall market conditions have contributed to a 39% drop in consolidated revenues and a
99% plunge in adjusted EBITDA.
Real Matters stock currently possesses a solid price-to-earnings ratio of 20. That puts this stock in
favourable value territory compared to its industry peers. The company will be forced to weather the
storm in North American real estate in the near term, but looking long I still like Real Matters for its
growth potential.
