The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Newmark (NASDAQ:NMRK) and the rest of the real estate services stocks fared in Q3.
Technology has been a double-edged sword in real estate services. On the one hand, internet listings are effective at disseminating information far and wide, casting a wide net for buyers and sellers to increase the chances of transactions. On the other hand, digitization in the real estate market could potentially disintermediate key players like agents who use information asymmetries to their advantage.
The 12 real estate services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was 0.8% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Newmark (NASDAQ:NMRK)
Founded in 1929, Newmark (NASDAQ:NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.
Newmark reported revenues of $863.5 million, up 25.9% year on year. This print exceeded analysts’ expectations by 11.8%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ adjusted operating income estimates.
Newmark pulled off the biggest analyst estimates beat of the whole group. Still, the market seems discontent with the results. The stock is down 3.6% since reporting and currently trades at $16.43.
Is now the time to buy Newmark? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: The Real Brokerage (NASDAQ:REAX)
Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ:REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.
The Real Brokerage reported revenues of $568.5 million, up 52.6% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with EPS in line with analysts’ estimates and a solid beat of analysts’ EBITDA estimates.
The Real Brokerage delivered the fastest revenue growth among its peers. The market seems content with the results as the stock is up 3.6% since reporting. It currently trades at $3.70.
Is now the time to buy The Real Brokerage? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Offerpad (NYSE:OPAD)
Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE:OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.
Offerpad reported revenues of $132.7 million, down 36.2% year on year, falling short of analysts’ expectations by 5.1%. It was a disappointing quarter as it posted a miss of analysts’ homes purchased estimates.
Offerpad delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 19.6% since the results and currently trades at $1.87.
Read our full analysis of Offerpad’s results here.
Zillow (NASDAQ:ZG)
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.
Zillow reported revenues of $676 million, up 16.4% year on year. This number surpassed analysts’ expectations by 0.8%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and revenue guidance for next quarter slightly topping analysts’ expectations.
The stock is down 2.5% since reporting and currently trades at $67.03.
Read our full, actionable report on Zillow here, it’s free for active Edge members.
Compass (NYSE:COMP)
Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE:COMP) is a digital-first company operating a residential real estate brokerage in the United States.
Compass reported revenues of $1.85 billion, up 23.6% year on year. This result topped analysts’ expectations by 3.2%. It was a very strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The stock is up 21.5% since reporting and currently trades at $9.46.
Read our full, actionable report on Compass here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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