Real Matters keeps $10.50 price target at ATB

ATB Capital Markets analyst Martin Toner maintained his “Outperform” rating and $10.50 price target on Real Matters (Real Matters Stock Quote, Chart, News, Analysts, Financials TSX:REAL) following the company’s fiscal first-quarter 2026 results, which showed a return to first-quarter profitability for the first time since 2022.

Before market open on Jan. 29, Real Matters reported Q1/FY26 revenue of $46.5-million, up 14% year over year and 1% quarter over quarter, in line with ATB’s $46.2-million estimate.

Net revenue of $13.0-million rose 19% year over year and 9% sequentially, exceeding consensus of $12.2-million, while net revenue margin expanded about 160 basis points year over year to 28.1%. Adjusted EBITDA of $0.1-million was in line with expectations.

Toner said results were driven by improving refinance activity and operating discipline, noting management continues to point to a growing pipeline of refinance candidates, with roughly 13 million U.S. mortgages carrying interest rates above 6%. Management is projecting more than 50% growth in the U.S. refinance market for the full fiscal year.

Operationally, Real Matters launched eight new clients in the quarter, including two top-100 U.S. lenders, and expanded its U.S. Title relationship with a Tier-1 lender into a new home-equity channel. Toner said investors have been waiting for a sustained turn in refinance volumes, and that Real Matters’ operating leverage positions it to benefit disproportionately as volumes recover.

Refinance momentum was most visible in U.S. Title, where refinance revenues rose 135% year over year, while U.S. Appraisal refinance revenues increased 27%, supported by new client wins, market-share gains and narrowing mortgage rate spreads. Management also flagged a pickup in activity in September and October.

Toner said industry forecasts point to a meaningful rebound in refinance volumes in the back half of the year, potentially up about 50% for the full fiscal period. He believes Real Matters is well positioned to capture that upside as higher-rate mortgages roll further into the money.

ATB’s $10.50 target implies about 71% upside, based on a discounted cash flow valuation using an 11.5% discount rate and 2.5% terminal growth rate.

Toner forecasts Adjusted EBITDA of $6.8-million on revenue of $204.3-million in fiscal 2026, improving to $18.2-million on revenue of $239.5-million in fiscal 2027.

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