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Real Brokerage (REAX)
NASDAQ:REAX
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Real Brokerage
(NASDAQ:REAX)
Rating:70Outperform
Price Target:―
Positive Factors
Agent Growth
Real Brokerage is quickly growing its agent count, adding 10,500 agents, growing 77% while most competitors have seen agent count decline.
Financial Performance
Revenue of $351 million was about 14% above the estimate and 15% above consensus, indicating strong financial performance.
Technological Advancements
REAX introduced Leo for CoPilot and Leo for Clients, two of the most groundbreaking tech-based agent and client-side real estate solutions.
Negative Factors
Housing Market Challenges
Management mentioned that it is seeing slower conversion rates for larger teams due to the tough housing market.
Market Dependence
Risks include dependence on underlying housing trends, agent churn, competition, and potential impacts from industry changes related to commission lawsuits.
Real Brokerage (REAX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$927.90M
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)―
Beta (1Y)1.38
Revenue Growth83.50%
EPS Growth8.45%
CountryUS
Employees410
SectorReal Estate
Sector Strength55
IndustryReal Estate - Services
Share Statistics
EPS (TTM)-0.02
Shares Outstanding206,200,000
10 Day Avg. Volume1,118,267
30 Day Avg. Volume1,104,789
Financial Highlights & Ratios
PEG Ratio-0.92
Price to Book (P/B)26.73
Price to Sales (P/S)0.00
P/FCF Ratio16.29
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.63Price Target Upside47.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Real Brokerage Business Overview & Revenue Model
Company DescriptionReal Brokerage (REAX) is a technology-powered real estate brokerage firm that operates in the residential real estate sector. It leverages innovative technology to simplify the home buying and selling process, providing real estate professionals with a comprehensive platform that integrates customer relationship management, marketing, and transaction management tools.
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:May 08, 2025
(Q1-2025)
| % Change Since: 0.67%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong growth narrative, with significant increases in revenue, agent count, and ancillary business contributions. The integration of AI and technological advancements were highlighted as key strategic initiatives. However, the presence of a net loss and a slight decline in gross margin temper the otherwise positive financial achievements.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Real Brokerage reported a record first-quarter revenue of $354 million, a 76% increase compared to $201 million in the prior year, driven by a 77% increase in the number of transactions closed.
Strong Agent Growth
The company ended the first quarter with 26,870 agents, a 61% increase from the prior year, and further added over 800 agents since the start of the second quarter.
AI Integration with Leo CoPilot
Real transitioned all inbound agent support calls to Leo CoPilot, making it one of the first brokerages to automate its primary support layer with AI. This is part of a broader strategy to increase agent productivity and operational efficiency.
Growth in Ancillary Businesses
High-margin ancillary businesses, including mortgage, title, and Real Wallet, grew by a combined 50% versus the prior year, contributing significantly to margin expansion.
Improved Financial Metrics
Gross profit increased by 63% to $33.9 million, and adjusted EBITDA improved to $8.3 million from $3.6 million in the first quarter of 2024.
Negative Updates
Net Loss Reduction but Still Present
Despite improvements, the company reported a net loss of $5.1 million, although this was a reduction from a loss of $16.1 million in the prior year.
Decline in Gross Margin
Gross margin decreased to 9.6% from 10.3% in the prior year, attributed to a higher mix of production from capped agents who contribute lower gross margin.
Company Guidance
In the first quarter of 2025, The Real Brokerage reported record results with revenue reaching $354 million, a 76% increase from the previous year, driven by a 77% rise in closed transactions, totaling 33,600. Gross profit increased by 63% to $33.9 million, while the net loss improved significantly to $5.1 million from $16.1 million in the prior year. The company's adjusted EBITDA more than doubled to $8.3 million. The Real Brokerage expanded its agent base by 61% year-over-year to 26,870 agents, with an additional 800 agents joining since the start of Q2. High-margin ancillary services, including mortgage, title, and Real Wallet, grew by a combined 50%. The company also highlighted the impact of Leo CoPilot, an AI-powered agent assistant, which now handles all inbound agent support calls, driving efficiency across operations.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 |
| EBITDA | -24.68M | -25.49M | -19.55M | -11.05M | -3.39M |
| Net Income | -26.54M | -27.50M | -20.58M | -12.34M | -4.46M |
Balance Sheet | |||||
| Total Assets | 86.59M | 64.55M | 43.76M | 40.00M | 21.91M |
| Cash, Cash Equivalents and Short-Term Investments | 32.83M | 28.93M | 18.74M | 37.89M | 21.23M |
| Total Debt | 0.00 | 0.00 | 96.00K | 131.00K | 215.00K |
| 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
Positive
4.50
Price Trends
4.29
Positive
4.50
Negative
4.84
Negative
Market Momentum
<0.01
Negative
64.14
Neutral
86.40
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REAX, the sentiment is Positive. The current price of 4.5 is above the 20-day moving average (MA) of 4.17, above the 50-day MA of 4.29, and below the 200-day MA of 4.84, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 64.14 is Neutral, neither overbought nor oversold. The STOCH value of 86.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for REAX.
Real Brokerage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $927.90M | ― | -52.95% | ― | 83.50% | 8.45% | |
67 Neutral | $1.45B | ― | -6.44% | 2.16% | 6.69% | -137.52% | |
63 Neutral | $6.87B | 19.10 | -1.13% | 7.17% | 4.72% | -24.75% | |
61 Neutral | $339.05M | 19.63 | 2.01% | ― | -4.61% | ― | |
61 Neutral | $418.15M | ― | -6.84% | ― | 2.47% | -74.15% | |
55 Neutral | $1.44B | ― | 199.35% | ― | 5.11% | -29.67% | |
44 Neutral | $407.15M | ― | -47.67% | ― | 2.36% | -23.60% |
* Real Estate Sector Average
Performance Comparison
REAX
Real Brokerage
4.50
0.10
2.27%
HOUS
Anywhere Real Estate ate
3.74
0.43
12.99%
RMAX
Re/Max Holdings
8.51
0.39
4.80%
EXPI
eXp World Holdings
9.27
-1.21
-11.55%
RDFN
Redfin
11.23
5.38
91.97%
OPEN
Opendoor Technologies
0.56
-1.23
-68.72%
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.