Q3 Earnings Outperformers: CBRE (NYSE:CBRE) And The Rest Of The Real Estate Services Stocks
Wrapping up Q3 earnings, we look at the numbers and key takeaways for the real estate services stocks, including CBRE (NYSE:CBRE) 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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 7.8% below.
Luckily, real estate services stocks have performed well with share prices up 14.3% on average since the latest earnings results.
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 $9.04 billion, up 14.8% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income.
“Our performance in the third quarter was highlighted by our second-highest third quarter core earnings per share in company history, driven by double-digit revenue and profit growth and significant operating leverage in all three business segments. In addition, we achieved operational gains across key parts of our business and continued to advance our strategic positioning,” said Bob Sulentic, chair and chief executive officer of CBRE.
CBRE Total Revenue
Interestingly, the stock is up 14.3% since reporting and currently trades at $140.71.
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 $372.5 million, up 73.5% year on year, outperforming analysts’ expectations by 7.4%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The Real Brokerage Total Revenue
The Real Brokerage scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.7% since reporting. It currently trades at $5.49.
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 $1.54 billion, down 3.1% year on year, falling short of analysts’ expectations by 5.7%. It was a disappointing quarter as it posted a miss of analysts’ transacted dollars estimates.
Anywhere Real Estate delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 26.2% since the results and currently trades at $5.05.
Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Marcus & Millichap reported revenues of $168.5 million, up 4% year on year. This print topped analysts’ expectations by 4.7%. It was a stunning quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
The stock is up 2% since reporting and currently trades at $40.99.
Founded in 2009, eXp World (NASDAQ:EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.
eXp World reported revenues of $1.23 billion, up 1.5% year on year. This number lagged analysts' expectations by 3.4%. Overall, it was a softer quarter as it also recorded a significant miss of analysts’ adjusted operating income and EPS estimates.
The stock is flat since reporting and currently trades at $14.35.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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