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Real Brokerage (REAX)
NASDAQ:REAX
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Real Brokerage
(NASDAQ:REAX)
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Rating:70Outperform
Price Target:―
Real Brokerage's stock reflects strong revenue growth and promising strategic initiatives, particularly in its fintech and ancillary services. However, persistent profitability challenges and a negative P/E ratio highlight the need for operational improvements and stronger financial stability. Technical indicators suggest caution, with potential short-term gains but risks for long-term investors.
Positive Factors
Revenue Growth
The significant revenue growth demonstrates Real Brokerage's expanding market presence and effective business strategies, indicating strong future potential.
Agent Network Expansion
A rapidly growing agent network enhances Real Brokerage's market reach and transaction volume, supporting sustained revenue and business growth.
Ancillary Services Growth
The robust growth in ancillary services diversifies revenue streams and strengthens Real Brokerage's competitive position in the real estate market.
Negative Factors
Profitability Challenges
Ongoing profitability issues highlight the need for operational improvements, which could impact long-term financial health and investor confidence.
Equity Ratio Decline
A declining equity ratio suggests weakening financial stability, potentially limiting Real Brokerage's ability to support future growth initiatives.
Operating Losses
Continued operating losses indicate challenges in achieving cost efficiency, which could hinder Real Brokerage's path to sustainable profitability.
Real Brokerage (REAX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$815.75M
Dividend YieldN/A
Average Volume (3M)2.19M
Price to Earnings (P/E)―
Beta (1Y)1.34
Revenue Growth72.57%
EPS Growth65.15%
CountryUS
Employees410
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.01
Shares Outstanding208,100,000
10 Day Avg. Volume1,941,706
30 Day Avg. Volume2,188,714
Financial Highlights & Ratios
PEG Ratio4.97
Price to Book (P/B)27.36
Price to Sales (P/S)0.70
P/FCF Ratio18.44
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue0.59
Enterprise Value/Gross Profit6.61
Enterprise Value/Ebitda-89.40
Forecast
1Y Price Target
$6.00Price Target Upside53.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Real Brokerage Business Overview & Revenue Model
Company DescriptionThe Real Brokerage Inc., together with its subsidiaries, operates as a technology-powered real estate brokerage company. It provides brokerage services for the real estate market through a network of agents. The company offers agents a mobile-focused tech platform to run its business, as well as business terms and wealth-building opportunities. It operates in 42 states in the United States, the District of Columbia, and Canada. The Real Brokerage Inc. is headquartered in Toronto, Canada.
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 Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and a milestone achievement of positive net income, driven by increased agent productivity and expansion of ancillary services. However, challenges were noted in gross margin compression and increased operating expenses.Q2-2025 Updates
Positive Updates
Record Revenue Growth
Revenue increased by 59% year-over-year to $541 million in Q2 2025, driven by a 62% increase in closed transactions.
First Quarter of Positive Net Income
Achieved positive net income of $1.6 million and positive operating income of $1.7 million for the first time.
Agent Growth and Productivity
Ended Q2 with 28,000 agents, a 43% increase from the prior year, and a 7% increase in transactions per average agent.
Strong Ancillary Business Performance
Ancillary business lines grew by 50%, with One Real Mortgage revenue growing 80% and Real Wallet deposits increasing by nearly 70%.
Acquisition of Flyhomes' Technology
Acquired Flyhomes' AI-powered home search portal to enhance the AI-driven home buying experience.
Negative Updates
Gross Margin Decline
Gross margin decreased to 8.9% from 9.4% year-over-year, impacted by a mix shift towards more productive agents reaching commission caps.
Title Revenue Deceleration
Revenue growth for One Real Title was just 7%, due to a strategic shift from team-based to state-based joint ventures.
Increased Operating Expenses
Operating expenses rose 42% year-over-year to $46.2 million, driven by revenue share expenses and investments in growth.
Company Guidance
During The Real Brokerage's second quarter earnings call for 2025, the company reported a record revenue of $541 million, representing a 59% increase from the previous year. This growth was driven by a 62% rise in closed transactions, totaling over 49,000 for the quarter, despite a 1% decline in industry transactions. Real achieved its first-ever positive operating income of $1.7 million and net income of $1.6 million. Adjusted EBITDA improved by 43% to $20 million, contributing to a strong cash flow from operating activities of $41 million. The company ended the quarter with 28,000 agents, a 43% year-over-year increase, and revenue churn remained low at 2%. Real's ancillary business lines, including One Real Mortgage and Real Wallet, grew by 50%, contributing 1% of total revenue and nearly 5% of gross profit. The acquisition of Flyhomes' AI-powered platform is expected to enhance their technology roadmap and consumer-facing products.Real Brokerage Financial Statement Overview
Summary
Real Brokerage has demonstrated strong revenue growth, effective cash flow management, and a stable balance sheet. Despite these positives, the company faces challenges in profitability with negative net profit and EBIT margins, and declining equity ratios, indicating a need for improved operational efficiencies and a stronger equity base.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.62B | 1.26B | 689.16M | 381.76M | 121.68M | 16.56M |
| Gross Profit | 143.91M | 114.74M | 62.87M | 31.95M | 11.09M | 2.15M |
| EBITDA | -10.64M | -24.68M | -25.49M | -19.55M | -11.05M | -3.39M |
| Net Income | -12.68M | -26.54M | -27.50M | -20.58M | -12.34M | -4.46M |
Balance Sheet | ||||||
| Total Assets | 149.43M | 86.59M | 64.55M | 43.76M | 40.00M | 21.91M |
| Cash, Cash Equivalents and Short-Term Investments | 54.77M | 32.83M | 28.93M | 18.74M | 34.63M | 21.23M |
| Total Debt | 0.00 | 0.00 | 0.00 | 96.00K | 131.00K | 215.00K |
| Total Liabilities | 100.46M | 54.45M | 27.46M | 21.35M | 12.99M | 1.11M |
| Stockholders Equity | 49.19M | 32.15M | 36.88M | 22.15M | 27.00M | 5.98M |
Cash Flow | ||||||
| Free Cash Flow | 67.26M | 47.69M | 19.24M | 4.59M | 3.77M | -1.62M |
| Operating Cash Flow | 68.25M | 48.73M | 19.87M | 6.00M | 3.94M | -1.60M |
| Investing Cash Flow | 1.87M | 3.81M | -6.63M | -9.05M | -10.21M | -16.00K |
| Financing Cash Flow | -30.72M | -33.14M | -3.96M | -7.85M | 13.95M | 22.93M |
Real Brokerage Technical Analysis
Negative
3.92
Price Trends
4.62
Negative
4.39
Negative
4.51
Negative
Market Momentum
-0.22
Positive
28.36
Positive
14.51
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 3.92 is below the 20-day moving average (MA) of 4.51, below the 50-day MA of 4.62, and below the 200-day MA of 4.51, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 28.36 is Positive, neither overbought nor oversold. The STOCH value of 14.51 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $21.95B | 38.24 | 5.60% | 2.04% | 32.76% | -2.01% | |
70 Outperform | $815.75M | ― | -31.81% | ― | 72.57% | 65.15% | |
67 Neutral | $1.64B | ― | -12.78% | 1.92% | 3.55% | -36.05% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
60 Neutral | $264.63M | 17.25 | 2.21% | ― | -5.21% | ― | |
57 Neutral | $1.06B | ― | -6.89% | ― | 2.74% | -118.94% | |
56 Neutral | $230.64M | ― | -36.97% | ― | 8.64% | 1.81% |
* Real Estate Sector Average
REAX
Real Brokerage
3.92
-1.32
-25.19%
HOUS
Anywhere Real Estate ate
9.44
4.80
103.45%
RMAX
Re/Max Holdings
8.12
-3.73
-31.48%
EXPI
eXp World Holdings
10.42
-2.47
-19.16%
BEKE
KE Holdings Inc. Sponsored ADR Class A
17.65
-4.27
-19.48%
DOUG
Douglas Elliman Inc.
2.60
1.11
74.50%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.