Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Offerpad (NYSE:OPAD) and the best and worst performers in the real estate services industry.
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 14 real estate services stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 13.1% below.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Luckily, real estate services stocks have performed well with share prices up 21.7% on average since the latest earnings results.
Weakest Q2: 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 $251.1 million, up 9.1% year on year. This print fell short of analysts’ expectations by 11.4%. Overall, it was a disappointing quarter for the company with revenue guidance for next quarter missing analysts’ expectations and a miss of analysts’ operating margin estimates.
“During the second quarter, we delivered revenue within our guidance and sequential improvement in Adjusted EBITDA. Our focus on expense management, and the continued growth in our asset light platform services, drove improvement in gross margin, contribution margin, and Adjusted EBITDA,” said Brian Bair, Offerpad’s chief executive officer.
Offerpad delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 4.6% since reporting and currently trades at $4.08.
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Best Q2: 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 $340.8 million, up 83.9% year on year, outperforming analysts’ expectations by 28.9%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
The Real Brokerage achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 2.9% since reporting. It currently trades at $5.61.
Cushman & Wakefield (NYSE:CWK) With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE:CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.
Cushman & Wakefield reported revenues of $2.29 billion, down 4.9% year on year, falling short of analysts’ expectations by 2.9%. It was a softer quarter as it posted a miss of analysts’ operating margin estimates.
Interestingly, the stock is up 2.6% since the results and currently trades at $13.65.
CBRE (NYSE:CBRE) Established in 1906, CBRE (NYSE:CBRE) is one of the largest commercial real estate services firms in the world.
CBRE reported revenues of $8.39 billion, up 8.7% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ earnings estimates but a miss of analysts’ operating margin estimates.
The stock is up 25.3% since reporting and currently trades at $123.17.
RE/MAX (NYSE:RMAX) Short for Real Estate Maximums, RE/MAX (NYSE:RMAX) operates a real estate franchise network spanning over 100 countries and territories.
RE/MAX reported revenues of $78.45 million, down 4.8% year on year. This result was in line with analysts’ expectations. It was a strong quarter as it also put up an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
The stock is up 49.9% since reporting and currently trades at $12.98.
This content was originally published on Stock Story
