Front Yard Residential Corporation [RESI] Stock trading around $16.34 per share: What’s Next?

Front Yard Residential Corporation [NYSE: RESI] price surged by 21.94 percent to reach at $2.94. The company report on November 23, 2020 that Front Yard Residential Signs Amended Merger Agreement with Pretium and Ares Management.

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Front Yard Residential Corporation (“Front Yard” or the “Company”) (NYSE: RESI), an industry leading provider of high-quality and affordable rental homes, announced that it has amended its definitive merger agreement with a partnership led by Pretium and including funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation (NYSE: ARES) (together, the “Pretium Partnership”) to increase the consideration payable to holders of outstanding shares of Front Yard stock to $16.25 per share in cash from $13.50 per share in cash, which values the Company at approximately $2.5 billion, including debt to be assumed or refinanced. The revised transaction price represents a 63% premium over Front Yard’s closing share price on October 16, 2020, the last trading day prior to the date on which the Company entered into the merger agreement.

Front Yard and the Pretium Partnership negotiated the amendment following the receipt by Front Yard of an unsolicited binding proposal (the “Proposal”) from an unaffiliated third party to acquire all outstanding shares of Front Yard common stock. The board of directors (the “Board”) of Front Yard, in consultation with its legal and financial advisors, carefully considered the terms of the Proposal and the amended Pretium Partnership transaction and determined that entering into the amendment to the Pretium Partnership merger agreement was in the best interests of Front Yard and its stockholders. Front Yard’s Board approved the amended merger agreement and recommends that Front Yard’s stockholders vote in favor of the amended Pretium Partnership merger agreement.

A sum of 9394581 shares traded at recent session while its average daily volume was at 909.56K shares. Front Yard Residential Corporation shares reached a high of $16.44 and dropped to a low of $16.25 until finishing in the latest session at $16.34.

The one-year RESI stock forecast points to a potential downside of -28.76. The average equity rating for RESI stock is currently 3.00, trading closer to a bullish pattern in the stock market.

Guru’s Opinion on Front Yard Residential Corporation [RESI]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for RESI shares is $12.69 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on RESI stock is a recommendation set at 3.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

JMP Securities have made an estimate for Front Yard Residential Corporation shares, keeping their opinion on the stock as Mkt Perform, with their previous recommendation back on October 20, 2020. The new note on the price target was released on June 12, 2020, representing the official price target for Front Yard Residential Corporation stock. Previously, the target price had yet another raise to $12.50, while JMP Securities analysts kept a Mkt Outperform rating on RESI stock. On May 18, 2020, analysts decreased their price target for RESI shares from 14 to 11.

The Average True Range (ATR) for Front Yard Residential Corporation is set at 0.37, with the Price to Sales ratio for RESI stock in the period of the last 12 months amounting to 4.39. The Price to Book ratio for the last quarter was 3.08, with the Price to Cash per share for the same quarter was set at 1.44.

RESI Stock Performance Analysis:

Front Yard Residential Corporation [RESI] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 21.94. With this latest performance, RESI shares gained by 22.12% in over the last four-week period, additionally plugging by 117.58% over the last 6 months – not to mention a rise of 41.96% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for RESI stock in for the last two-week period is set at 95.70, with the RSI for the last a single of trading hit 97.88, and the three-weeks RSI is set at 90.79 for Front Yard Residential Corporation [RESI]. The present Moving Average for the last 50 days of trading for this stock 11.48, while it was recorded at 13.98 for the last single week of trading, and 10.16 for the last 200 days.

Insight into Front Yard Residential Corporation Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and Front Yard Residential Corporation [RESI] shares currently have an operating margin of -75.71 and a Gross Margin at -11.46. Front Yard Residential Corporation’s Net Margin is presently recorded at -61.63.

Return on Total Capital for RESI is now -6.19, given the latest momentum, and Return on Invested Capital for the company is -5.74. Return on Equity for this stock declined to -26.00, with Return on Assets sitting at -4.88. When it comes to the capital structure of this company, Front Yard Residential Corporation [RESI] has a Total Debt to Total Equity ratio set at 485.56. Additionally, RESI Total Debt to Total Capital is recorded at 82.92, with Total Debt to Total Assets ending up at 80.23. Long-Term Debt to Equity for the company is recorded at 392.22, with the Long-Term Debt to Total Capital now at 66.98.

Reflecting on the efficiency of the workforce at the company, Front Yard Residential Corporation [RESI] managed to generate an average of -$479,050 per employee. Receivables Turnover for the company is 16.42 with a Total Asset Turnover recorded at a value of 0.08.

RESI Stock EPS

With the latest financial reports released by the company, Front Yard Residential Corporation posted -0.47/share EPS, while the average EPS was predicted by analysts to be reported at -0.43/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -9.30%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for RESI. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Front Yard Residential Corporation go to 10.00%.

Front Yard Residential Corporation [RESI] Insider Position Details

There are presently around $701 million, or 74.10% of RESI stock, in the hands of institutional investors. The top three institutional holders of RESI stocks are: DEER PARK ROAD CORP with ownership of 7,682,494, which is approximately 5.84% of the company’s market cap and around 2.60% of the total institutional ownership; VANGUARD GROUP INC, holding 6,727,567 shares of the stock with an approximate value of $109.93 million in RESI stocks shares; and BLACKROCK INC., currently with $59.93 million in RESI stock with ownership of nearly -6.078% of the company’s market capitalization.

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Positions in Front Yard Residential Corporation stocks held by institutional investors increased at the end of November and at the time of the November reporting period, where 61 institutional holders increased their position in Front Yard Residential Corporation [NYSE:RESI] by around 6,983,284 shares. Additionally, 73 investors decreased positions by around 6,758,722 shares, while 22 investors held positions by with 29,188,438 shares. The mentioned changes placed institutional holdings at 42,930,444 shares, according to the latest SEC report filing. RESI stock had 19 new institutional investments in for a total of 3,821,940 shares, while 26 institutional investors sold positions of 1,941,982 shares during the same period.

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