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Real Brokerage (REAX)
NASDAQ:REAX
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Real Brokerage
(NASDAQ:REAX)
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Rating:58Neutral
Price Target:
$4.00
▲(44.93% Upside)
Action:DowngradedDate:12/30/25
Score is primarily supported by improving financial quality (strong cash generation, very low leverage, and rapid revenue growth) and a constructive earnings update with positive adjusted EBITDA. Offsetting factors are persistent GAAP losses and thin margins, while technicals remain bearish with the price below major moving averages and negative momentum.
Positive Factors
Strong cash generation
Sustained, sizeable operating and free cash flow provides durable financial flexibility to fund technology, agent incentives and ancillary product development without relying on external financing. This cash generation also cushions the business through housing-cycle variability and supports reinvestment.
Low leverage / strong balance sheet
Minimal debt materially reduces interest burden and financial risk, giving management optionality to invest in platform expansion and M&A, and to withstand transaction-volume swings in real estate. A clean balance sheet strengthens long-term resilience versus leveraged peers.
Rapid agent growth and network scale
A growing agent base increases transaction flow and recurring commission capture, creating durable network effects as platform tools and admin services become more valuable. Higher agent productivity and scale support sustained revenue growth and improve long-term take-rate potential.
Negative Factors
Persistent GAAP losses
Continued GAAP losses indicate the firm has not yet converted top-line scale into consistent accounting profitability. This limits retained earnings, may constrain long-term return on equity, and keeps investor reliance on cash metrics and execution rather than stable net income.
Thin gross margins
Low gross margins leave limited room to absorb fixed operating costs and investment spend, making profitability sensitive to mix shifts, agent caps, or commission pressure. Sustaining margin improvement is essential for durable operating leverage as the company scales.
Title business transition risk
A significant revenue hit from reorganizing title operations reveals execution and integration risk in ancillary services. Volatility or underperformance in these adjacencies can slow margin expansion and reduce diversification benefits the platform seeks to deliver long-term.
Real Brokerage (REAX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$577.87M
Dividend YieldN/A
Average Volume (3M)1.54M
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue Growth65.60%
EPS Growth69.72%
CountryUS
Employees410
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)-0.02
Shares Outstanding210,900,000
10 Day Avg. Volume1,509,214
30 Day Avg. Volume1,542,582
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 Cap0.85
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit3.14
Enterprise Value/Ebitda-59.81
Forecast
1Y Price Target
$5.83Price Target Upside111.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)-0.01
Revenue Forecast (FY)$2.35B
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:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call highlights strong top-line growth (revenue +56% Y/Y), meaningful operating leverage, improving profitability metrics (adjusted EBITDA +57% Y/Y) and positive operating cash flow with a debt-free balance sheet and share repurchases. Growth in agent count (+31% Y/Y), rapid adoption of AI tools (LEO) and early traction in ancillary products (mortgage, title, Wallet) are notable positives. Near-term headwinds include margin compression from a higher share of post-cap transactions, a slow start to 2026 due to seasonality/weather, transitional drag in the title JV rollout, and continued but shrinking GAAP losses. Overall, the progress and scale demonstrated across core brokerage operations and the company’s liquidity position outweigh the near-term mix and seasonal pressures.Q4-2025 Updates
Positive Updates
Strong Revenue and Transaction Growth
Fourth-quarter revenue grew 44% year-over-year to $505M; full-year revenue grew 56% to nearly $2.0B (from $1.3B in 2024). Closed transactions in Q4 increased 38% to nearly 49,000 and the company completed over 185,000 transactions for the year.
Improving Profitability and Cash Generation
Adjusted EBITDA rose 56% in Q4 to $14.2M and increased 57% for the full year to $62.9M. Net loss narrowed to $4.2M in Q4 and $8.1M for the full year (versus $6.7M and $26.5M in prior-year periods). The company generated positive operating cash flow of approximately $66M for 2025.
Operating Leverage and Expense Discipline
Full-year gross profit increased 44% to $166M while operating expenses increased only 25% to $175M. Adjusted operating expense as a percentage of revenue improved to 4.3% (from 5.7% prior-year) and adjusted OpEx per transaction declined 22% to $440 (from $565), demonstrating scalability.
Agent Base Expansion and Productivity Gains
Agent headcount grew 31% year-over-year to 31,739 agents at year-end 2025 and the company reports over 33,000 agents today. Management cited improving agent productivity and higher engagement as drivers of growth.
Ancillary Services Momentum
Ancillary revenue grew 24% in Q4 to $3.2M and reached $11.9M for the full year. OneReal Mortgage revenue was $6M in 2025 (up 50% YoY); OneReal Title generated $5M (up 5% YoY); RealWallet produced ~$900K in 2025 and is running at ~ $1.5M annualized.
RealWallet Adoption and Financial Products
RealWallet adoption exceeded 7,000 agents with ~$23M in deposits. The platform extended over $8M in lines of credit; Q4 wallet revenue was $339K (an 8x increase from its launch quarter). Wallet is positioned as both a revenue and retention tool.
Technology and AI Integration
Proprietary platform Reason and embedded AI tools drove efficiency: LEO Copilot has recorded over 700,000 agent engagements since launch and automated ~46% of support volume (~20,000 inquiries). HeyLeo consumer portal launched in beta with integrations (180 current; target 400 by July) to scale agent-to-consumer engagement.
Strong Balance Sheet and Shareholder Returns
The company finished the year debt-free with $49.9M in unrestricted cash and investments, approximately $50M liquidity, and returned $39M to shareholders through buybacks (including $15M in Q4).
Negative Updates
Gross Margin Compression Due to Mix Shift
Fourth-quarter gross margin declined to 7.7% from 8.6% year-over-year and full-year margin was 8.4%. Management attributed the decline to a ~400 basis-point increase in the proportion of post-cap (lower-margin) transactions.
Near-Term Seasonality and Q1 2026 Weakness
Company expects Q1 2026 revenue, operating loss, and adjusted EBITDA to decline sequentially from Q4 2025 due to an unseasonably slow start (volatile weather and snowstorms impacting transaction velocity in January and February).
Title Business Transition Drag
Transition from team-based to state-based title JVs created a revenue drag (management quantified the impact at a couple hundred thousand dollars) and OneReal Title only grew 5% in 2025; leadership change and JV restructuring contributed to underperformance in 2025.
Ancillary Revenue Still a Small Share of Total
Although growing, ancillary revenue totaled $11.9M for the year versus nearly $2.0B in consolidated revenue — indicating these higher-margin lines remain early in scale and relatively immaterial to consolidated results today.
Consolidated GAAP Loss Still Present
Despite substantial improvement, the company reported a consolidated operating loss of $9.2M and a consolidated net loss of $8.1M for the full year — positive trend but ongoing GAAP losses remain.
Legal and One-Time Costs
Q4 operating expense included a $750K charge related to a nationwide settlement of the CoinArc class action lawsuit, representing a discrete near-term headwind to OpEx.
Margin Drag from Capped Agents Expected to Continue Near-Term
Management expects the lower-margin mix from capped (post-cap) agents to continue into the first half of 2026 before normalizing, pressuring gross margin until mix and ancillary contributions improve.
Company Guidance
Management said it will not provide formal guidance but expects Q1 2026 revenue, operating loss and adjusted EBITDA to decline sequentially from Q4 2025 (Q4 revenue $505M; Q4 adjusted EBITDA $14.2M) due to a slow January–February, while maintaining that full‑year 2026 should see organic growth meaningfully outpace the industry and for revenue and gross profit to grow faster than operating expenses, driving year‑over‑year improvements in GAAP and non‑GAAP profitability. Key context: 2025 finished with nearly $2.0B revenue (+56% YoY), $166M gross profit (+44%), full‑year adjusted EBITDA $62.9M (+57%), net loss narrowed to $8.1M, operating loss improved to $9.2M, operating cash flow was $66M, $39M returned via buybacks, unrestricted cash ~$50M and no debt; platform scale included ~49,000 closed transactions in Q4 (≈185,000+ full year), 31,739 agents at year‑end (now >33,000), Q4 gross margin 7.7% (FY 8.4%), a 400‑bp increase in post‑cap transactions in Q4, revenue churn 1.6%, ancillary revenue Q4 $3.2M ($11.9M FY), RealWallet 2025 revenue ~$0.9M (run‑rate ~$1.5M) with $23M deposits and $8M in lines, OneReal Mortgage $6M (+50%) and OneReal Title $5M (+5%), adjusted OpEx per transaction declined to $440 (‑22% YoY from $565), and management expects the capped‑agent mix pressure to persist through H1 but normalize in H2 as fee changes, ancillary reacceleration and improving market activity restore margins.Real Brokerage Financial Statement Overview
Summary
Strong mix of rapid revenue scaling and improving fundamentals, supported by essentially no debt and solid, growing operating/free cash flow. The key drag remains profitability: net income is still negative and gross margins are thin (~8–9%), limiting cushion against operating costs.Income Statement
REAX is delivering strong top-line expansion, with revenue scaling from $0.38B (2022) to $1.26B (2024) and reaching $1.81B in TTM (Trailing-Twelve-Months), alongside an improved growth rate versus 2024. However, profitability remains the key drag: net results are still negative in every period provided, and while losses have narrowed materially in TTM (Trailing-Twelve-Months) versus 2024, gross margin remains thin (~8–9%), leaving limited buffer to absorb operating costs.42
Neutral
Balance Sheet
The balance sheet is a relative strength, highlighted by essentially no debt (debt-to-equity at or near 0 across recent periods), which reduces financial risk and interest burden. Equity has also improved versus 2024, supporting balance sheet resilience as the business scales. The main weakness is continued negative returns on equity, reflecting ongoing net losses and indicating that shareholder capital is not yet generating positive earnings.72
Positive
Cash Flow
Cash generation is solid and improving: operating cash flow and free cash flow are strongly positive in recent years, rising to roughly $80M of operating cash flow and $79M of free cash flow in TTM (Trailing-Twelve-Months), with healthy free cash flow growth. This cash-flow profile meaningfully offsets income statement losses and suggests good working-capital dynamics and cash discipline. The key watch item is that accounting profitability is still negative, so sustaining strong cash generation through different housing-cycle conditions will matter.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.81B | 1.26B | 689.16M | 381.76M | 121.68M | 16.56M |
| Gross Profit | 156.64M | 114.74M | 62.87M | 31.95M | 11.09M | 2.15M |
| EBITDA | -8.21M | -24.68M | -25.49M | -19.55M | -11.05M | -3.39M |
| Net Income | -10.54M | -26.54M | -27.50M | -20.58M | -12.34M | -4.46M |
Balance Sheet | ||||||
| Total Assets | 145.22M | 86.59M | 64.55M | 43.76M | 40.00M | 21.91M |
| Cash, Cash Equivalents and Short-Term Investments | 91.72M | 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 | 91.62M | 54.45M | 27.46M | 21.35M | 12.99M | 1.11M |
| Stockholders Equity | 53.64M | 32.15M | 36.88M | 22.15M | 27.00M | 5.98M |
Cash Flow | ||||||
| Free Cash Flow | 79.32M | 47.69M | 19.24M | 4.59M | 3.77M | -1.62M |
| Operating Cash Flow | 80.28M | 48.73M | 19.87M | 6.00M | 3.94M | -1.60M |
| Investing Cash Flow | -17.36M | 3.81M | -6.63M | -9.05M | -10.21M | -16.00K |
| Financing Cash Flow | -29.30M | -33.14M | -3.96M | -7.85M | 13.95M | 22.93M |
Real Brokerage Technical Analysis
Negative
2.76
Price Trends
3.36
Negative
3.61
Negative
4.00
Negative
Market Momentum
-0.20
Negative
41.28
Neutral
59.79
Neutral
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 2.76 is below the 20-day moving average (MA) of 2.80, below the 50-day MA of 3.36, and below the 200-day MA of 4.00, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 41.28 is Neutral, neither overbought nor oversold. The STOCH value of 59.79 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $19.07B | 49.85 | 4.91% | 2.26% | 25.33% | -15.12% | |
60 Neutral | $206.68M | 18.48 | 2.87% | ― | -6.06% | ― | |
58 Neutral | $577.87M | -511.97 | -25.27% | ― | 65.60% | 69.72% | |
56 Neutral | $1.11B | ― | -10.15% | 2.09% | 5.08% | 41.21% | |
54 Neutral | $202.51M | -2.45 | -41.11% | ― | 6.62% | 30.94% |
* Real Estate Sector Average
REAX
Real Brokerage
2.76
-1.97
-41.65%
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BEKE
KE Holdings Inc. Sponsored ADR Class A
17.05
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DOUG
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32.94%
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.