This overlooked tech stock is undervalued, analyst says

ATB Capital Markets analyst Martin Toner reiterated an “Outperform” rating and $10.50 target on Real Matters (Real Matters Stock Quote, Chart, News, Analysts, Financials TSX:REAL) following what he described as a strong first-quarter fiscal 2026 performance, led by accelerating momentum in the company’s U.S. Title business.

Real Matters reported Q1/FY26 results before market open on Jan. 29, posting revenue of $46.5-million, up 14% year over year, and net revenue of $13.0-million, up 19% year over year. Consolidated Adjusted EBITDA came in at $0.1-million, flat quarter over quarter, as improving operating leverage was offset by continued investment to support growth. The company exited the quarter with $43.8-million in cash and no debt, preserving balance-sheet flexibility.

Toner said performance was driven primarily by U.S. Title, where gross revenue surged 76% year over year and refinance origination volumes increased 135% year over year, reflecting new client wins, market share gains, and early signs of a refinancing recovery. He added that the U.S. Appraisal segment continued to deliver stable earnings with solid margins despite softer purchase activity, while the Canadian business remained a high-margin but lower-growth contributor.

Net revenue of $13.0-million rose 9% quarter over quarter, comprised of U.S. Appraisal net revenue of $8.4-million (down 1% sequentially but up 7% year over year), U.S. Title net revenue of $2.8-million (up 83% quarter over quarter and 110% year over year), and Canadian net revenue of $1.8-million (down 5% sequentially but up 3% year over year). U.S. Title net revenue margin expanded to 63.9%, up from 54.2% in the prior quarter.

Toner said there is continued commercial traction, noting that Real Matters launched eight new clients during the quarter, including two top-100 U.S. lenders, and added a new channel with a Tier-1 lender in U.S. Title. He said these wins are already translating into higher refinance volumes and support management’s strategy of driving growth through market share gains rather than relying solely on a broad mortgage market recovery.

Operating expenses totalled $13.0-million, down 0.8% quarter over quarter, compared with a 9% sequential increase in net revenue. Toner said this reflects ongoing cost discipline and positions the company to generate operating leverage as volumes scale.

On the outlook, management remains cautiously optimistic on improving U.S. mortgage fundamentals, pointing to roughly 13 million mortgages with rates above 6% as a meaningful refinancing opportunity over time. With a growing sales pipeline, an expanding client base, and a strong cash position with no debt, Toner said Real Matters appears increasingly well-positioned to scale volumes and move toward its target operating model as market conditions normalize.

-30-