As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the real estate services industry, including Offerpad (NYSE:OPAD) 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 Q1; on average, revenues beat analyst consensus estimates by 4.2%. while next quarter's revenue guidance was 4% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the real estate services stocks have fared somewhat better than others, they collectively declined, with share prices falling 2.9% on average since the previous earnings results.
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 $285.4 million, down 53.2% year on year, topping analysts' expectations by 5.6%. It was a weak quarter for the company, with revenue guidance for next quarter missing analysts' expectations.
“The first quarter of 2024 continued the positive trajectory we experienced exiting 2023. While the macro is still volatile, the first quarter was one of increasing stability and we believe this trend will continue through 2024,” said Brian Bair, Offerpad’s chairman and chief executive officer.
The stock is down 45.7% since the results and currently trades at $4.
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Best Q1: JLL (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 $5.12 billion, up 8.7% year on year, outperforming analysts' expectations by 6.4%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings and operating margin estimates.
The stock is up 10.3% since the results and currently trades at $204.46.
Weakest Q1: 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 $1.13 billion, down 0.4% year on year, falling short of analysts' expectations by 1.8%. It was a weak quarter for the company, with a miss of analysts' operating margin and earnings estimates.
Anywhere Real Estate had the weakest performance against analyst estimates in the group. The stock is down 40% since the results and currently trades at $3.25.
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 $78.29 million, down 8.3% year on year, surpassing analysts' expectations by 1.3%. It was a slower quarter for the company, with a miss of analysts' operating margin estimates.
RE/MAX scored the highest full-year guidance raise among its peers. The stock is up 14.2% since the results and currently trades at $8.19.
Marcus & Millichap (NYSE:MMI) Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Marcus & Millichap reported revenues of $129.1 million, down 16.6% year on year, surpassing analysts' expectations by 1.3%. It was a solid quarter for the company, with a decent beat of analysts' operating margin estimates.
The stock is down 5.8% since the results and currently trades at $31.42.
