Newmark Group (NMRK) AI Stock Analysis

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Newmark Group

(NASDAQ:NMRK)

Rating:56Neutral

Price Target:

$10.50

▼( -7.81% Downside)

Newmark Group's overall stock score reflects mixed financial performance with strong revenue but weak profitability and cash flow management. While technical indicators are currently bearish, the positive sentiment from the earnings call and strategic corporate actions like stock buybacks and executive appointments provide some optimism. The stock's high valuation remains a concern, limiting the overall score.

Newmark Group (NMRK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.14B

Dividend Yield1.05%

Average Volume (3M)1.05M

Price to Earnings (P/E)29.5

Beta (1Y)1.64

Revenue Growth13.87%

EPS Growth90.42%

CountryUS

Employees8,100

SectorReal Estate

Sector Strength56

IndustryReal Estate - Services

Share Statistics

EPS (TTM)0.21

Shares Outstanding163,266,590

10 Day Avg. Volume911,320

30 Day Avg. Volume1,046,755

Financial Highlights & Ratios

PEG Ratio2.25

Price to Book (P/B)1.26

Price to Sales (P/S)0.00

P/FCF Ratio-14.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$14.92

Price Target Upside30.99% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Newmark Group Business Overview & Revenue Model

Company DescriptionNewmark Group, Inc. is a leading commercial real estate advisory firm that operates globally. The company provides a wide range of services including leasing, capital markets, global corporate services, industrial and logistics, property management, valuation and advisory, and retail services. With a significant presence in major markets across the world, Newmark aims to deliver comprehensive real estate solutions to clients through its innovative technology and deep industry expertise.

How the Company Makes MoneyNewmark Group, Inc. generates revenue primarily through commissions and fees derived from its comprehensive suite of real estate services. Key revenue streams include leasing commissions from facilitating property leases, capital markets services fees from arranging property sales and financing, and property management fees from managing client assets. Additionally, the company earns fees from advisory and valuation services. Newmark's earnings are significantly influenced by its strategic partnerships with property owners, corporate clients, and investors, as well as its ability to leverage technology to enhance service delivery and client engagement.

Newmark Group Financial Statement Overview

Summary

Newmark Group shows moderate revenue growth and strong gross margins, but struggles with profitability and cash flow. Improved leverage is positive, but low returns on equity and liquidity issues are concerns.

Income Statement

Positive

Newmark Group's revenue has shown a modest growth trajectory with a 4.34% increase in the TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin remains strong at 100%, indicating efficient cost management. However, the net profit margin for TTM is relatively low at 1.52%, reflecting challenges in translating revenue growth into net income. The EBIT and EBITDA margins are moderate at 5.88% and 12.06%, respectively, suggesting room for operational improvement.

Balance Sheet

Neutral

The company's debt-to-equity ratio has improved to 0.49 in the TTM, indicating a more balanced leverage compared to previous years. The return on equity (ROE) for TTM stands at 2.79%, which is relatively low, suggesting limited returns for equity holders. The equity ratio is stable at 32.18%, reflecting a moderate level of financial stability. Despite improvements in leverage, the overall financial stability could be enhanced with better profitability.

Cash Flow

Neutral

Newmark Group's cash flow situation is concerning, with negative free cash flow in the TTM, reflecting challenges in generating cash from operations. The operating cash flow to net income ratio is negative, indicating inefficiencies in cash generation from core operations. Additionally, the free cash flow to net income ratio is negative, which may signal liquidity concerns and the need for improved cash management practices.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.86B	2.74B	2.47B	2.71B	2.91B	1.90B
	Gross Profit
2.86B	2.74B	2.47B	2.71B	2.91B	1.90B
	EBIT
168.13M	163.04M	125.22M	185.57M	1.25B	184.00M
	EBITDA
344.82M	337.34M	291.56M	351.38M	1.38B	325.19M
	Net Income Common Stockholders
43.53M	61.23M	42.58M	83.28M	750.73M	80.06M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
157.08M	197.69M	164.99M	233.80M	704.70M	224.73M
	Total Assets
4.85B	4.71B	4.47B	3.94B	5.22B	3.98B
	Total Debt
770.94M	2.02B	1.75B	1.31B	2.32B	1.99B
	Net Debt
613.86M	1.83B	1.59B	1.08B	2.14B	1.80B
	Total Liabilities
3.29B	3.19B	2.89B	2.40B	3.53B	3.04B
	Stockholders Equity
1.56B	1.21B	1.25B	1.54B	1.69B	941.19M
Cash Flow		Free Cash Flow
-146.63M	-43.05M	-321.32M	1.13B	-79.63M	-797.52M
	Operating Cash Flow
-120.56M	-9.94M	-265.96M	1.20B	-59.91M	-777.69M
	Investing Cash Flow
-31.52M	-33.43M	-49.74M	308.63M	453.09M	-3.60M
	Financing Cash Flow
181.01M	89.53M	261.46M	-1.46B	-396.28M	817.82M

Newmark Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.39

Price Trends

50DMA

11.41

Negative

100DMA

12.45

Negative

200DMA

13.42

Negative

Market Momentum

MACD

-0.02

Positive

RSI

34.76

Neutral

STOCH

27.67

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMRK, the sentiment is Negative. The current price of 11.39 is above the 20-day moving average (MA) of 11.25, below the 50-day MA of 11.41, and below the 200-day MA of 13.42, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 34.76 is Neutral, neither overbought nor oversold. The STOCH value of 27.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMRK.

Newmark Group Risk Analysis

Newmark Group disclosed 56 risk factors in its most recent earnings report. Newmark Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Howard Lutnick's confirmation as the U.S. Secretary of Commerce and the loss of his services could have an adverse effect on our business. Q4, 2024

Changes in our tax rates, unavailability of certain tax credits or reliefs, exposure to additional tax liabilities or assessments or challenges to our tax positions or interpretations could adversely affect our results of operations and financial condition. Q4, 2024

In connection with his confirmation as the 41st Secretary of Commerce, Mr. Howard Lutnick has stated his intention to divest his interests in our company, Cantor and CFGM to comply with U.S. government ethics rules. We cannot predict the consequences of this divestiture. Q4, 2024

Newmark Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JLL	76 Outperform	$10.99B	20.69	8.16%	―	13.63%	78.40%
CWK	74 Outperform	$2.40B	14.80	9.53%	―	1.24%	1205.18%
CBRE	74 Outperform	$38.90B	39.19	12.15%	―	13.14%	1.70%
EXPI	67 Neutral	$1.26B	―	-6.44%	2.49%	6.69%	-137.52%
Sector *	60 Neutral	$2.82B	10.38	0.33%	8508.19%	5.98%	-17.49%
NMRK	56 Neutral	$2.14B	29.48	5.32%	1.05%	13.87%	90.42%
RDFN	52 Neutral	$1.30B	―	199.35%	―	5.11%	-29.67%

* Real Estate Sector Average

Performance Comparison

NMRK

Newmark Group

10.28

-0.12

-1.15%

CBRE

CBRE Group

120.87

31.26

34.88%

JLL

Jones Lang Lasalle

215.43

16.89

8.51%

EXPI

eXp World Holdings

7.56

-4.00

-34.60%

RDFN

Redfin

9.57

3.09

47.69%

CWK

Cushman & Wakefield

9.52

-1.20

-11.19%

Newmark Group Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 3.26%|

Next Earnings Date:Aug 01, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant revenue and earnings growth across multiple business lines, driven by strategic expansion and a strong market presence. However, increased compensation costs and potential geopolitical and macroeconomic uncertainties were noted as challenges. Overall, the positive aspects of growth and operational performance outweigh the concerns.

Q1-2025 Updates

Positive Updates

Substantial Revenue and Earnings Growth

Newmark reported a 22% increase in revenues and approximately 40% growth in earnings metrics for the first quarter of 2025.

Strong Performance Across Business Lines

Capital Markets grew by 33%, leasing fees increased by 31%, and management and servicing revenues rose by over 10%.

Management Services Growth

Management Services, Servicing, and Other increased by 10.5%, marking the seventh consecutive period of solid year-on-year improvement.

Improved EBITDA and Margins

Adjusted EBITDA grew to $89.2 million, up 40.5%, with the adjusted EBITDA margin improving by approximately 180 basis points to 13.4%.

Negative Updates

Increased Compensation Costs

Compensation increased by 21.8%, reflecting higher commission-based revenues and costs related to growth initiatives.

Market Uncertainty and Geopolitical Headwinds

Potential geopolitical headwinds and macroeconomic uncertainties could dampen industry activity, although no specific impacts were detailed.

Company Guidance

During Newmark Group's first quarter 2025 earnings call, the company reported robust growth with a 22% increase in revenues and approximately 40% growth in earnings metrics. Capital Markets revenues surged by 33%, driven by a 62.5% improvement in volume and a 40% boost in GSE/FHA origination volumes. Leasing fees rose 31% due to heightened activity in key regions like New York City, Boston, and the San Francisco Bay Area. Management and servicing revenues climbed over 10%, reflecting strong valuation and advisory growth. The company's adjusted EPS grew by 40% to $0.21, while adjusted EBITDA was up 40.5% to $89.2 million, improving the adjusted EBITDA margin by 180 basis points to 13.4%. Despite macroeconomic uncertainties, Newmark maintained its 2025 guidance, with expectations for better-than-anticipated Capital Markets revenues and consistent growth in Management and Servicing. The company ended the quarter with $157.1 million in cash and a net leverage ratio of 1.3 times, signifying a solid financial position to support future growth initiatives.

Newmark Group Corporate Events

M&A TransactionsStock BuybackRegulatory Filings and Compliance

Newmark Group’s Stock Buyback from Howard Lutnick

Positive

May 19, 2025

On May 16, 2025, Howard W. Lutnick, the U.S. Secretary of Commerce and former Executive Chairman of Newmark Group, agreed to sell 10,969,523 shares of Class A Common Stock back to the company as part of a divestiture to comply with U.S. government ethics rules. The transaction, valued at $127,027,077, is part of Newmark’s stock repurchase program and is expected to enhance shareholder value. Additionally, Mr. Lutnick transferred his voting shares of CFGM and other interests to trusts controlled by Brandon G. Lutnick, ensuring that Cantor Fitzgerald remains Newmark’s largest shareholder.

The most recent analyst rating on (NMRK) stock is a Buy with a $19.00 price target. To see the full list of analyst forecasts on Newmark Group stock, see the NMRK Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy

Newmark Group Appoints Luis Alvarado as COO

Positive

Apr 8, 2025

On April 7, 2025, Newmark Group appointed Luis Alvarado as Chief Operating Officer, a role in which he will optimize global operations and drive business expansion. Alvarado, who has been with Newmark since 2015, has played a crucial role in the company’s growth and will continue to enhance market share and operational efficiency in his new position.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.