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Real Brokerage (REAX)
NASDAQ:REAX
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Real Brokerage
(NASDAQ:REAX)
71Outperform
Positive Factors
Agent Growth
Real's agent count grew to 24,140 ending the quarter, up 77% year-over-year, which is above the estimate, showing significant growth despite challenging market conditions.
Financial Performance
Revenue of $351 million was about 14% above the estimate and 15% above consensus, indicating strong financial performance.
Negative Factors
Market Valuation
REAX trades at the highest multiple in the residential brokerage group, which could be seen as a risk.
Real Brokerage (REAX) vs. S&P 500 (SPY)
Market Cap
$871.08M
Dividend YieldN/A
Average Volume (3M)947.25K
Price to Earnings (P/E)―
Beta (1Y)1.87
Revenue Growth83.50%
EPS Growth8.45%
CountryUS
Employees167
SectorReal Estate
Sector Strength69
IndustryReal Estate
Share Statistics
EPS (TTM)-0.14
Shares Outstanding204,000,000
10 Day Avg. Volume1,104,495
30 Day Avg. Volume947,249
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.67
Price to Cash Flow (P/CF)51.70
P/FCF Ratio44.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.67Price Target Upside49.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Real Brokerage Business Overview & Revenue Model
Company DescriptionThe Real Brokerage Inc operates a multi-state, technology-powered residential real estate brokerage. It has a network base of over 1000 affiliated agents, Real assists home buyers, sellers, and renters. It generates revenue through real estate transactions and collects a real estate commission for the services rendered.
How the Company Makes MoneyReal Brokerage generates revenue primarily through commissions earned on real estate transactions facilitated by its network of licensed real estate agents. The company provides its agents with a technology-driven platform that enhances their ability to close deals efficiently. Real Brokerage typically takes a percentage of the commission earned on each transaction as its fee. The company also benefits from partnerships with various service providers in the real estate ecosystem, which may include mortgage lenders, insurance companies, and home service vendors. These partnerships can lead to referral fees or co-marketing opportunities that contribute to its overall revenue.
Real Brokerage Financial Statement Overview
Summary
Real Brokerage demonstrates strong revenue growth and effective cash flow management, but faces challenges in profitability and equity stability. The company should focus on improving operational efficiencies to achieve positive net margins while maintaining a solid equity base to support expansion.Income Statement
Real Brokerage has experienced significant revenue growth, with a 83.5% increase from 2023 to 2024. Gross profit margin is stable at 9.1% for 2024, but negative net profit and EBIT margins indicate persistent profitability challenges. The company needs to improve operational efficiency to enhance profitability.72
Positive
Balance Sheet
The balance sheet is relatively stable with no significant debt and a healthy cash position. The equity ratio is declining, with 2024 showing 37.1%, reflecting less shareholder equity relative to assets. The company needs to strengthen its equity base to support growth.65
Positive
Cash Flow
Free cash flow has shown remarkable growth, with a substantial increase in operating cash flow. The free cash flow to net income ratio is strong, indicating effective cash generation relative to net income losses. However, reliance on financing activities in prior years suggests a need for sustainable cash flow generation from operations.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.26B | 689.16M | 381.76M | 121.68M | 16.56M | Gross Profit |
| 114.74M | 62.87M | 31.95M | 11.09M | 2.15M | EBIT |
| -25.23M | -26.01M | -19.17M | -11.02M | -2.65M | EBITDA |
| -24.68M | -25.49M | -19.55M | -11.05M | -3.39M | Net Income Common Stockholders |
| -26.54M | -27.50M | -20.58M | -12.34M | -4.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 32.83M | 28.93M | 18.74M | 37.89M | 21.23M | Total Assets |
| 86.59M | 64.55M | 43.76M | 40.00M | 21.91M | Total Debt |
| 0.00 | 0.00 | 96.00K | 131.00K | 215.00K | Net Debt |
| -23.38M | -14.71M | -10.75M | -28.95M | -21.01M | Total Liabilities |
| 54.45M | 27.46M | 21.35M | 12.99M | 1.11M | Stockholders Equity |
| 32.15M | 36.88M | 22.15M | 27.00M | 5.98M |
| Cash Flow | Free Cash Flow | |||
| 47.69M | 19.24M | 4.59M | 3.77M | -1.62M | Operating Cash Flow |
| 48.73M | 19.87M | 6.00M | 3.94M | -1.60M | Investing Cash Flow |
| 3.81M | -6.63M | -9.05M | -10.21M | -16.00K | Financing Cash Flow |
| -33.14M | -3.96M | -7.85M | 13.95M | 22.93M |
Real Brokerage Technical Analysis
Negative
4.46
Price Trends
4.83
Negative
5.03
Negative
5.17
Negative
Market Momentum
-0.18
Positive
36.59
Neutral
16.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REAX, the sentiment is Negative. The current price of 4.46 is below the 20-day moving average (MA) of 4.94, below the 50-day MA of 4.83, and below the 200-day MA of 5.17, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 36.59 is Neutral, neither overbought nor oversold. The STOCH value of 16.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REAX.
Real Brokerage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $871.08M | ― | -76.91% | ― | 83.50% | 8.45% | |
66 Neutral | $2.63B | 24.51 | 3.83% | ― | 8.31% | -49.90% | |
63 Neutral | $1.47B | ― | -7.50% | 2.07% | 6.69% | -137.52% | |
61 Neutral | $4.76B | 19.07 | -3.20% | 8.08% | 6.43% | -19.69% | |
59 Neutral | $4.52B | ― | -36.85% | ― | 15.23% | 55.04% | |
58 Neutral | $1.25B | ― | 199.35% | ― | -4.16% | -17.19% | |
44 Neutral | $803.10M | ― | -46.67% | ― | -25.81% | -34.43% |
* Real Estate Sector Average
Performance Comparison
REAX
Real Brokerage
4.30
1.09
33.96%
EXPI
eXp World Holdings
9.38
-1.52
-13.94%
RDFN
Redfin
10.50
4.18
66.14%
REZI
Resideo Technologies
16.92
-5.73
-25.30%
OPEN
Opendoor Technologies
1.11
-1.52
-57.79%
COMP
Compass
8.80
5.38
157.31%
Real Brokerage Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -9.90% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call revealed strong growth in revenue, agent count, and ancillary services, alongside innovations like Real Wallet. However, challenges remain with operating losses and expected seasonal revenue decline. Overall, the company's positive growth metrics outweigh the ongoing challenges.Highlights
Record Revenue for 2024
Revenue for the year 2024 reached $1.3 billion, marking an 84% increase from $689 million in 2023. This is the first time the company surpassed the $1 billion revenue mark.
Agent Growth Acceleration
The company ended 2024 with 24,140 agents, a 77% increase from the prior year. As of the start of 2025, the agent count reached approximately 26,200.
Real Wallet Launch and Expansion
Real Wallet launched with 2,500 agents opening business checking accounts, with an annualized revenue run rate of over $500,000.
Significant Growth in Ancillary Services
One Real Mortgage and One Real Title saw combined growth of 105% in 2024, with mortgage services growing over 200% and title services growing 60%.
Positive Adjusted EBITDA
The company reported a record adjusted EBITDA of $40 million in 2024, up 188% from the prior year.
Successful Private Label Program
Since its launch, the private label program attracted approximately 40 independent brokerages, representing nearly 1,200 agents.
Lowlights
Operating Loss Persisted
The company reported an operating loss of $6.4 million in Q4 2024, compared to $11.3 million in Q4 2023.
Revenue Decline Expected in Q1 2025
Due to seasonal trends, the company expects revenue to decline sequentially in Q1 2025 compared to Q4 2024.
Ongoing Investment Impacts Net Profit
Despite improved profitability, the company remains in an investment phase, affecting net profit margins.
Company Guidance
During the Real Brokerage earnings call for the fourth quarter and full year 2024, the company reported impressive metrics showcasing significant growth. In 2024, Real closed over 120,000 transactions, marking an 81% increase from 2023, and achieved a total transaction value of $49 billion, up 90% year-over-year. Revenue surged to $1.3 billion, an 84% increase from the previous year, making it the first time Real surpassed the $1 billion revenue mark. Additionally, gross profit grew 82% to $115 million, while adjusted EBITDA reached a record $40 million, reflecting a 188% increase. The company ended the year with 24,140 agents, a 77% rise compared to 2023, and by early 2025, the agent count had further increased to approximately 26,200. The call highlighted the success of Real's strategy, including the integration of AI-powered tools like Leo Copilot and the expansion of their fintech platform, Real Wallet, which contributed to a reported annualized run rate revenue of over $500,000. The ancillary business lines, One Real Mortgage and One Real Title, also saw substantial growth, with combined annual growth of 105%.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.