As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the real estate services industry, including RE/MAX (NYSE:RMAX) 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 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.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Luckily, real estate services stocks have performed well with share prices up 24.2% on average since the latest earnings results.
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 print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
"We continue to operate our business as efficiently and effectively as possible, which contributed to better-than-expected second-quarter financial results," said Erik Carlson, RE/MAX Holdings Chief Executive Officer.
Interestingly, the stock is up 42% since reporting and currently trades at $12.30.
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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 happy with the results as the stock is up 7.2% since reporting. It currently trades at $5.84.
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, falling short of analysts’ expectations by 11.4%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations and a miss of analysts’ operating margin estimates.
Offerpad delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 11.5% since the results and currently trades at $4.35.
Anywhere Real Estate (NYSE:HOUS) Formerly known as Realogy Holdings, Anywhere Real Estate (NYSE:HOUS) is a residential real estate company with a network of brokerages, franchises, and settlement services.
Anywhere Real Estate reported revenues of $1.67 billion, flat year on year. This print lagged analysts' expectations by 1.3%. It was a slower quarter as it also produced a miss of analysts’ earnings estimates.
The stock is up 24% since reporting and currently trades at $5.84.
Opendoor (NASDAQ:OPEN) Founded by real estate guru Eric Wu, Opendoor (NASDAQ:OPEN) offers a technology-driven, convenient, and streamlined process to buy and sell homes.
Opendoor reported revenues of $1.51 billion, down 23.5% year on year. This number beat analysts’ expectations by 2.9%. More broadly, it was a weak quarter with revenue guidance for next quarter missing analysts’ expectations.
Opendoor had the slowest revenue growth among its peers. The stock is down 1.3% since reporting and currently trades at $2.10.
This content was originally published on Stock Story
