Wrapping up Q2 earnings, we look at the numbers and key takeaways for the real estate services stocks, including Zillow (NASDAQ: ZG) and its peers.
Technology has been a double-edged sword in real estate services. On the one hand, internet listings are effective at disseminating information far and wide, casting a wide net for buyers and sellers to increase the chances of transactions. On the other hand, digitization in the real estate market could potentially disintermediate key players like agents who use information asymmetries to their advantage.
The 12 real estate services stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was 0.9% above.
Luckily, real estate services stocks have performed well with share prices up 24.9% on average since the latest earnings results.
Zillow (NASDAQ: ZG)
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Zillow reported revenues of $655 million, up 14.5% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 2.8% since reporting and currently trades at $83.80.
Is now the time to buy Zillow? Access our full analysis of the earnings results here, it’s free.
Best Q2: The Real Brokerage (NASDAQ: REAX)
Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ: REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.
The Real Brokerage reported revenues of $540.7 million, up 58.7% year on year, outperforming analysts’ expectations by 12.1%. The business had a stunning quarter with EPS in line with analysts’ estimates and a solid beat of analysts’ EBITDA estimates.
The Real Brokerage delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 15.5% since reporting. It currently trades at $4.74.
Is now the time to buy The Real Brokerage? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: eXp World (NASDAQ: EXPI)
Founded in 2009, eXp World (NASDAQ: EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.
eXp World reported revenues of $1.31 billion, up 1.1% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 2.9% since the results and currently trades at $11.15.
Read our full analysis of eXp World’s results here.
Opendoor (NASDAQ: OPEN)
Founded by real estate guru Eric Wu, Opendoor (NASDAQ: OPEN) offers a technology-driven, convenient, and streamlined process to buy and sell homes.
Opendoor reported revenues of $1.57 billion, up 3.7% year on year. This result surpassed analysts’ expectations by 4.2%. Taking a step back, it was a mixed quarter as it also logged EPS in line with analysts’ estimates but a significant miss of analysts’ adjusted operating income estimates.
The stock is up 105% since reporting and currently trades at $5.20.
Read our full, actionable report on Opendoor here, it’s free.
Cushman & Wakefield (NYSE: CWK)
With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE: CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.
Cushman & Wakefield reported revenues of $2.48 billion, up 8.6% year on year. This number beat analysts’ expectations by 4.6%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 26.4% since reporting and currently trades at $15.58.
Read our full, actionable report on Cushman & Wakefield here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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