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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
$774.13M
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)1.32
Revenue Growth65.60%
EPS Growth69.72%
CountryUS
Employees410
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.00
Shares Outstanding208,100,000
10 Day Avg. Volume1,593,640
30 Day Avg. Volume1,752,391
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 Cap1.06
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit5.72
Enterprise Value/Ebitda-77.41
Forecast
1Y Price Target
$7.00Price Target Upside88.17% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 13, 2026
Earnings Call Sentiment Positive
The earnings call highlighted significant organic growth, expansion of the agent base, and positive adjusted EBITDA, indicating strong operational performance. However, there were challenges such as gross margin pressure and an operating loss. The transition in the Title business also presented headwinds. Overall, the positive aspects slightly outweigh the negative challenges.Q3-2025 Updates
Positive Updates
Exceptional Organic Growth
Closed transactions increased nearly 50% year-over-year, surpassing 30,000 agents on the platform for the first time.
Revenue and Gross Profit Increase
Revenue grew 53% to $569 million and gross profit increased 40% to $45 million, outpacing operating expenses.
Positive Adjusted EBITDA
Adjusted EBITDA was positive $20.4 million, a 54% improvement from last year, contributing to operating cash flow from operations of $9 million.
Agent Base Expansion
Ended the quarter with over 30,100 agents, up 39% from a year ago, with current agent count at approximately 30,700.
Real Wallet Adoption
More than 4,600 agents now use Real Wallet business checking accounts, with total deposits exceeding $20 million, up from approximately $14 million at the time of the last earnings call.
AI and Automation Advancements
Launched a dedicated AI automation team, saving the business over 10,000 hours annually, and expanded AI tools to handle 47% of agent interactions.
Negative Updates
Gross Margin Pressure
Gross margin decreased to 7.9% from 8.6% in the prior year period, primarily due to a higher proportion of transactions completed by agents who have reached their annual cap.
Operating Loss
Reported an operating loss of negative $0.5 million compared with a $2.5 million loss in the third quarter of 2024.
Title Business Transition Impact
One Real Title revenue was impacted by the shift from team-based to state-based joint ventures, creating headwinds of about minus 50%.
Company Guidance
In the third quarter of 2025, Real Brokerage demonstrated exceptional growth metrics and financial performance. The company achieved a 53% year-over-year revenue increase, totaling $569 million, and a gross profit rise of 40% to $45 million, despite operating expenses also reaching $45 million. The agent base grew by 39%, surpassing 30,000 agents for the first time, contributing to a 49% increase in closed transactions, totaling over $21 billion. Adjusted EBITDA was positive at $20.4 million, marking a 54% improvement from the previous year, while operating cash flow was approximately $9 million. The company's brokerage revenue alone grew 53% to $565 million, driven by agent growth and higher productivity. Real's ancillary services, though still early in development, showed promising growth with One Real Mortgage's revenue up 47% and Real Wallet operating at an annualized revenue run rate of over $1.2 million. Notably, Real maintained a strong balance sheet with nearly $56 million in unrestricted cash and no debt. The company refrained from providing formal guidance but indicated seasonal expectations for Q4. Overall, Real Brokerage's strategic focus on technology integration, AI adoption, and ancillary services is poised to drive sustained growth and margin expansion in the coming years.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
3.72
Price Trends
4.45
Negative
4.32
Negative
4.45
Negative
Market Momentum
-0.19
Negative
40.09
Neutral
48.20
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 3.72 is below the 20-day moving average (MA) of 3.84, below the 50-day MA of 4.45, and below the 200-day MA of 4.45, indicating a bearish trend. The MACD of -0.19 indicates Negative momentum. The RSI at 40.09 is Neutral, neither overbought nor oversold. The STOCH value of 48.20 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $774.13M | -70.32 | -25.27% | ― | 65.60% | 69.72% | |
67 Neutral | $1.56B | ― | -12.78% | 2.00% | 3.55% | -36.05% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $251.14M | 12.54 | 2.87% | ― | -6.06% | ― | |
58 Neutral | $1.23B | -11.25 | -6.89% | ― | 2.74% | -118.94% | |
55 Neutral | $19.31B | 35.15 | 5.60% | 2.14% | 32.76% | -2.01% | |
51 Neutral | $213.79M | -3.46 | ― | ― | 8.64% | 1.81% |
* Real Estate Sector Average
REAX
Real Brokerage
3.72
-1.92
-34.04%
HOUS
Anywhere Real Estate ate
10.98
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174.50%
RMAX
Re/Max Holdings
7.70
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-37.40%
EXPI
eXp World Holdings
9.89
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-29.86%
BEKE
KE Holdings Inc. Sponsored ADR Class A
16.22
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-26.57%
DOUG
Douglas Elliman Inc.
2.41
0.48
24.87%
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.