Q3 Real Estate Services Earnings Review: First Prize Goes to The Real Brokerage (NASDAQ:REAX)

Looking back on real estate services stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including The Real Brokerage and its peers.

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 as they are up 4.1% on average since the latest earnings results.

Best Q3: The Real Brokerage

Founded in Toronto, Canada in 2014, The Real Brokerage 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. This print exceeded analysts’ expectations by 6.5%. Overall, it was a stunning quarter for the company with EPS in line with analysts’ estimates and an impressive beat of analysts’ EBITDA estimates.

“Real continued to materially outperform the broader housing market in the third quarter, with closed transactions up 49% year-over-year,” said Tamir Poleg, Chairman and Chief Executive Officer.

The Real Brokerage pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 8.7% since reporting and currently trades at $3.88.

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.

Marcus & Millichap

Founded in 1971, Marcus & Millichap specializes in commercial real estate investment sales, financing, research, and advisory services.

Marcus & Millichap reported revenues of $193.9 million, up 15.1% year on year, in line with analysts’ expectations. The business had an exceptional quarter with EPS in line with analysts’ estimates and a solid beat of analysts’ EBITDA estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.6% since reporting. It currently trades at $29.01.

Is now the time to buy Marcus & Millichap? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Offerpad

Known for giving homeowners cash offers within 24 hours, Offerpad 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 and a miss of analysts’ homes sold estimates.

Offerpad delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 22.4% since the results and currently trades at $1.80.

Read our full analysis of Offerpad’s results here.

RE/MAX

Short for Real Estate Maximums, RE/MAX operates a real estate franchise network spanning over 100 countries and territories.

RE/MAX reported revenues of $73.25 million, down 6.7% year on year. This result lagged analysts' expectations by 0.7%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a slight miss of analysts’ revenue estimates.

The stock is flat since reporting and currently trades at $8.23.

Read our full, actionable report on RE/MAX here, it’s free for active Edge members.

Zillow

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow 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%. It was a strong quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates and revenue guidance for next quarter slightly topping analysts’ expectations.

The stock is up 4.1% since reporting and currently trades at $71.58.

Read our full, actionable report on Zillow here, it’s free for active Edge members.