Why RE/MAX (RMAX) Stock Is Trading Lower Today

What Happened:

Shares of real estate franchise company RE/MAX (NYSE:RMAX) fell 10.5% in the morning session after as major indices pulled back and yields soared after the Bureau of Labour Statistics reported CPI (Consumer Price Index - a gauge of the average price consumers pay for goods and services) for the month of March 2024 that came in slightly hotter than expected at 3.5% year on year (versus analysts expectations for 3.4%). According to the report, shelter and gasoline prices contributed more than half of the monthly increase in the index. 

The inflation print, while only slightly above expectations, is adding to fears that the Fed could delay rate cut plans in 2024. Following the inflation report, consensus estimate was for two rate cuts in 2024 (down from the previous consensus for three rate cuts). 

As a reminder, the driver of a stock's value is the sum of its future cash flows discounted back to today. With lower interest rates, investors can apply higher valuations to their stocks. No wonder so many in the investment community are optimistic about 2024. We at StockStory remain cautious, as following the crowd can lead to adverse outcomes. During times like this, it's best to own high-quality, cash-flowing companies that can weather the ups and downs of the market.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RE/MAX? Access our full analysis report here, it's free.

What is the market telling us:

RE/MAX's shares are somewhat volatile and over the last year have had 33 moves greater than 5%. But moves this big are very rare even for RE/MAX and that is indicating to us that this news had a significant impact on the market's perception of the business.

RE/MAX is down 39.6% since the beginning of the year, and at $7.63 per share it is trading 62.7% below its 52-week high of $20.47 from July 2023. Investors who bought $1,000 worth of RE/MAX's shares 5 years ago would now be looking at an investment worth $184.88.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.