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Why RealPage Stock Plunged Today

By Evan Niu, CFA - Nov 7, 2019 at 1:32PM

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The real estate software maker reported third-quarter earnings and an acquisition.

What happened

Shares of RealPage ( RP ) have plunged today, down by 10% as of 12:30 p.m. EST, after the company reported third-quarter earnings and reduced its full-year sales outlook. The real estate software maker also said it would be acquiring peer Buildium.

So what

Revenue in the third quarter increased 13% to $255.2 million, which led to adjusted net income of $42.6 million, or $0.45 per share. That bottom-line result was right on target with what analysts were expecting. Adjusted EBITDA jumped 22% to $72.1 million.

Real estate agent handing keys over

Image source: Getty Images.

RealPage has agreed to acquire Buildium, a software-as-a-service (SaaS) company that makes property management software, in order to expand in the small and medium-sized business (SMB) market. RealPage believes there are 50 million units in the SMB market segment in the U.S., representing "a significant growth opportunity." Buildium helps manage approximately 2 million residential units.

Now what

The purchase price for Buildium will be $580 million in cash, and RealPage expects to close the deal by year-end. Buildium has generated roughly $50 million in revenue on a trailing-12-month (TTM) basis, and RealPage believes Buildium can grow its annual revenue run rate to $60 million by the end of 2019.

RealPage's outlook calls for revenue of $250 million to $252 million in the fourth quarter, which should translate into adjusted earnings per share of $0.47 to $0.49. Analysts are modeling for $258.7 million in sales. For full-year 2019, total revenue is now expected to be $983 million to $985 million, down from a prior range of $987 million to $995 million.

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