As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at real estate services stocks, starting with Compass (NYSE:COMP).
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 2% on average since the latest earnings results.
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 $1.85 billion, up 23.6% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a very strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 33.9% since reporting and currently trades at $10.42.
Is now the time to buy Compass? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: 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 $568.5 million, up 52.6% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with EPS in line with analysts’ estimates and a solid beat of analysts’ EBITDA estimates.
The Real Brokerage pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10.8% since reporting. It currently trades at $3.96.
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.
Weakest Q3: 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 $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 21.1% since the results and currently trades at $1.83.
Read our full analysis of Offerpad’s results here.
Newmark (NASDAQ:NMRK)
Founded in 1929, Newmark (NASDAQ:NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.
Newmark reported revenues of $863.5 million, up 25.9% year on year. This result beat analysts’ expectations by 11.8%. Aside from that, it was a mixed quarter as it also produced an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ adjusted operating income estimates.
Newmark achieved the biggest analyst estimates beat among its peers. The stock is down 8.5% since reporting and currently trades at $17.04.
Read our full, actionable report on Newmark here, it’s free for active Edge members.
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 $6.51 billion, up 10.9% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ Capital Markets revenue estimates but a miss of analysts’ Work Dynamics revenue estimates.
The stock is up 7% since reporting and currently trades at $319.99.
Read our full, actionable report on JLL here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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