RESAAS is a stock to watch, this analyst says

Beacon Securities analyst Gabriel Leung says RESAAS Services (RESAAS Services Stock Quote, Chart, News, Analysts, Financials TSXV:RSS) has evolved from a real estate networking platform into an enterprise software company with improving revenue visibility.

Vancouver-based RESAAS provides referral, payment, data exchange and market intelligence infrastructure for real estate organizations globally.

The company’s main products include RESAAS Enterprise Referral, RESAAS Commercial Data Exchange and RESAAS Pay.

RESAAS initially built a freemium network of about 700,000 agents across more than 160 countries, but has since shifted toward enterprise contracts.

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In his Sept. 17 watchlist report, Leung said the company has gained traction with major real estate brands, including RE/MAX, Savills, Chestertons and Epique Realty. RE/MAX is deploying MAXRefer, an AI-powered global referral platform built on RESAAS technology, across more than 145,000 agents in more than 110 countries and territories.

RESAAS has also expanded its Commercial Data Exchange platform, known as CODE, across Vancouver, Calgary and Toronto, with customers including CBRE, Cushman & Wakefield, Colliers, Cadillac Fairview, Oxford and Avison Young.

Leung said RESAAS has reached EBITDA breakeven and expects sequential revenue growth as customer deployments continue. The company estimates gross margin flow-through above 90%, creating potential for strong operating leverage.

The company recently reported Q2 revenue of $475,000 and EBITDA of $37,000, up from $155,000 and negative $36,000 a year earlier. Net income was $47,000.

RESAAS has disclosed an 18-month backlog of US$8.2-million, including software licence fees and potential transaction fees from referral commissions processed through RESAAS Pay.

Leung estimates RE/MAX alone could represent about $30-million in annual revenue from licence seats and RESAAS Pay if fully deployed.

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