Spotting Winners: Marcus & Millichap (NYSE:MMI) And Real Estate Services Stocks In Q3
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how real estate services stocks fared in Q3, starting with Marcus & Millichap (NYSE:MMI).
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 11.1% on average since the latest earnings results.
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 $168.5 million, up 4% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
Marcus & Millichap Total Revenue
Interestingly, the stock is up 2% since reporting and currently trades at $40.99.
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 pulled off 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’ adjusted operating income 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 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 $5.87 billion, up 14.8% year on year. This result topped analysts’ expectations by 4.4%. It was a stunning quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.
The stock is up 3.4% since reporting and currently trades at $289.35.
With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE:CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.
Cushman & Wakefield reported revenues of $2.34 billion, up 2.5% year on year. This number lagged analysts' expectations by 1.8%. It was a slower quarter as it also logged a significant miss of analysts’ adjusted operating income estimates.
The stock is up 13.5% since reporting and currently trades at $14.90.
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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