Marcus & Millichap (MMI) AI Stock Analysis

• Market Cap: $1.02B
• Dividend Yield: 1.8%
• Average Volume (3M): 123.62K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: 20.74%
• EPS Growth: 78.92%
• Country: US
• Employees: 897
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 0.01
• Shares Outstanding: 38,922,604
• 10 Day Avg. Volume: 119,304
• 30 Day Avg. Volume: 123,620
• PEG Ratio: 1.88
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 2.13
• P/FCF Ratio: 106.92
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.41
• Enterprise Value/Gross Profit: 3.73
• Enterprise Value/Ebitda: 104.56
• 1Y Price Target: $29.00
• Price Target Upside: 7.77% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $28.00 ▲(4.05% Upside)

The overall stock score of 56 reflects Marcus & Millichap's strong revenue and transaction growth, as highlighted in the earnings call, which is a positive indicator of strategic success. However, the company's financial performance is weighed down by profitability challenges and a negative P/E ratio, which are significant concerns. The technical indicators suggest a bearish trend, further impacting the score.

Positive Factors

Revenue Growth

Consistent revenue growth over multiple quarters indicates strong market demand and effective business strategies, enhancing long-term stability.

Transaction Growth

Outpacing market transaction growth suggests competitive advantages and strong client relationships, supporting sustained business expansion.

Financing Revenue Increase

Significant growth in financing revenue highlights the company's ability to capitalize on favorable market conditions and diversify income streams.

Negative Factors

Profitability Challenges

Persistent profitability issues may hinder long-term financial health and limit the company's ability to reinvest in growth opportunities.

Larger Deals Revenue Decline

Declines in large deal revenues suggest potential challenges in capturing high-value transactions, which could impact overall revenue growth.

Legal Reserve Impact

The legal reserve increases operating expenses, reducing profitability and potentially affecting financial flexibility and future earnings.

Marcus & Millichap Business Overview & Revenue Model

Company Description

Marcus & Millichap, Inc., an investment brokerage company, provides real estate investment brokerage and financing services to sellers and buyers of commercial real estate in the United States and Canada. The company offers commercial real estate investment sales, financing, research, and advisory services for multifamily, retail, office, industrial, single-tenant net lease, seniors housing, self-storage, hospitality, medical office, and manufactured housing. It also operates as a financial intermediary that provides commercial real estate capital markets solutions, including senior debt, mezzanine debt, joint venture, and preferred equity, as well as loan sales and consultative/due diligence services to commercial real estate owners, developers, investors, and capital providers. In addition, the company provides various ancillary services, including research, advisory, and consulting services to developers, lenders, owners, real estate investment trusts, high net worth individuals, pension fund advisors, and other institutions. Marcus & Millichap, Inc. was founded in 1971 and is headquartered in Calabasas, California.

How the Company Makes Money

Marcus & Millichap generates revenue primarily through commissions earned on the sale of commercial real estate properties. When a property is sold, MMI typically receives a percentage of the sale price as a brokerage fee. In addition to transaction fees, the company also earns income from advisory services, which may include property valuations, market research, and investment analysis. Another key revenue stream comes from financing services, where MMI assists clients in securing financing for their real estate investments and earns fees for these services. The firm benefits from a strong reputation and extensive relationships with investors, lenders, and property owners, which contribute to its ability to close deals and maintain a robust pipeline of transactions.

Marcus & Millichap Financial Statement Overview

Summary

Marcus & Millichap faces challenges with profitability, as seen in the negative net profit margins and declining EBIT. However, the company maintains a stable balance sheet with low leverage and a strong cash flow position, showing resilience in cash generation. The focus should be on improving profitability while maintaining financial stability.

Income Statement

The income statement shows a concerning trend with declining profitability. The TTM data indicates a negative net profit margin of -0.92%, and EBIT margin is also negative at -0.74%. Although there is a slight revenue growth of 3.5% TTM, the company has struggled with profitability over the past few years, as evidenced by consistent negative net income figures.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio is relatively low at 0.13, indicating manageable leverage. However, the return on equity is negative at -1.12% TTM, highlighting challenges in generating returns for shareholders. The equity ratio remains stable, suggesting a solid capital structure.

Cash Flow

Cash flow analysis reveals a strong improvement in free cash flow, with a growth rate of 49.1% TTM. The operating cash flow to net income ratio is 0.68, indicating decent cash generation relative to net income. The free cash flow to net income ratio is robust at 1.32, suggesting effective cash management despite profitability issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	751.28M	696.06M	645.93M	1.30B	1.30B	716.91M
Gross Profit	283.55M	264.59M	239.28M	450.82M	456.23M	269.03M
EBITDA	10.12M	4.37M	-25.89M	156.14M	205.60M	71.16M
Net Income	-6.67M	-12.36M	-34.03M	104.22M	142.47M	42.84M
Balance Sheet
Total Assets	812.49M	869.80M	878.41M	1.00B	1.05B	779.12M
Cash, Cash Equivalents and Short-Term Investments	241.69M	349.46M	349.13M	489.31M	565.99M	401.41M
Total Debt	78.56M	84.22M	87.74M	82.09M	77.31M	78.60M
Total Liabilities	210.25M	238.98M	233.14M	290.20M	348.89M	232.29M
Stockholders Equity	602.24M	630.82M	645.27M	713.51M	696.30M	546.84M
Cash Flow
Free Cash Flow	70.04M	13.84M	-81.80M	1.96M	249.05M	31.14M
Operating Cash Flow	77.04M	21.71M	-72.43M	13.63M	255.90M	38.09M
Investing Cash Flow	-94.42M	-9.90M	74.87M	-53.98M	-108.36M	-17.23M
Financing Cash Flow	-37.83M	-28.75M	-67.68M	-105.56M	-5.92M	-10.33M

Marcus & Millichap Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMI, the sentiment is Negative. The current price of 26.91 is below the 20-day moving average (MA) of 27.37, below the 50-day MA of 28.46, and below the 200-day MA of 30.00, indicating a bearish trend. The MACD of -0.60 indicates Positive momentum. The RSI at 29.93 is Positive, neither overbought nor oversold. The STOCH value of 13.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MMI.

Marcus & Millichap Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JLL	79 Outperform	$16.54B	26.50	9.14%	―	12.51%	32.34%
CBRE	70 Outperform	$49.61B	40.68	14.26%	―	14.61%	30.19%
CWK	69 Neutral	$3.94B	17.45	12.21%	―	6.77%	150.72%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
NMRK	59 Neutral	$3.15B	29.40	8.08%	0.68%	22.22%	94.52%
KW	58 Neutral	$1.36B	-38.31	0.52%	4.96%	-3.75%	90.10%
MMI	56 Neutral	$1.02B	-148.93	-1.09%	1.80%	20.74%	78.92%