As the Q2 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the real estate services industry, including Redfin (NASDAQ:RDFN) 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 slower Q2. As a group, revenues beat analysts' consensus estimates by 1.9% while next quarter's revenue guidance was 13.1% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data, and real estate services stocks have had a rough stretch. On average, share prices are down 5.2% since the latest earnings results.
Redfin (NASDAQ:RDFN) Founded by a former medical school student, electrical engineer, and Amazon (NASDAQ:AMZN) data engineer, Redfin (NASDAQ:RDFN) is a real estate company offering brokerage services through an online platform.
Redfin reported revenues of $295.2 million, up 7.1% year on year. This print exceeded analysts' expectations by 1.2%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts' earnings estimates but revenue guidance for next quarter missing analysts' expectations.
“In a still-declining market, Redfin grew revenues, profits and market share,” said Redfin CEO Glenn Kelman.
Unsurprisingly, the stock is down 4% since reporting and currently trades at $6.76.
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Best Q2: JLL (NYSE:NYSE:JLL) Founded in 1999 through the merger of Jones Lang Wootton and LaSalle Partners, JLL (NYSE:JLL) is a company specializing in real estate advisory and investment management services.
JLL reported revenues of $5.63 billion, up 11.4% year on year, in line with analysts' expectations. It performed better than its peers, but it was unfortunately a mixed quarter for the company with a decent beat of analysts' earnings estimates but a miss of analysts' Work Dynamics revenue estimates.
The market seems content with the results as the stock is up 1.1% since reporting. It currently trades at $234.94.
Weakest Q2: 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, falling short of analysts' expectations by 1.3%. It was a weak quarter for the company with a miss of analysts' earnings and Franchise revenue estimates.
As expected, the stock is down 11.9% since the results and currently trades at $4.15.
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 $1.70 billion, up 13.8% year on year, surpassing analysts' expectations by 3.3%. More broadly, it was a weaker quarter for the company with a miss of analysts' earnings estimates and revenue guidance for next quarter missing analysts' expectations.
The stock is down 6.6% since reporting and currently trades at $4.12.
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, in line with analysts' expectations. Zooming out, it was a weak quarter for the company with a miss of analysts' earnings estimates.
The stock is up 9.4% since reporting and currently trades at $107.52.
This content was originally published on Stock Story
