E
arnings Season Wrap-Up: Redfin and The Real Brokerage Shine Amidst Industry Trends
As the dust settles on Q4 earnings, it's time to dissect the real estate services sector. While technology has revolutionized the industry, its impact is multifaceted. On one hand, online listings have democratized access to information, increasing transaction chances for buyers and sellers. On the other, digitization threatens traditional players who rely on information asymmetries.
The 13 tracked real estate services stocks collectively reported a respectable Q4, with revenues beating consensus estimates by 5.5%. However, next quarter's guidance fell short, and share prices have taken a hit, averaging a 5.8% decline since the latest earnings release.
Redfin (NASDAQ:RDFN), founded by an unlikely trio of a medical school student, electrical engineer, and Amazon data engineer, stands out in this context. The online brokerage reported $244.3 million in revenues, a 12% year-over-year increase that narrowly exceeded analyst expectations. While the top-line beat was impressive, Redfin's EBITDA miss tempered the enthusiasm.
CEO Glenn Kelman remains optimistic, citing four consecutive quarters of revenue growth and improving profits across all business segments. With demand on the rise and a strengthened sales force, Redfin is poised for continued success in 2025. The stock has responded accordingly, surging 46.6% since reporting to trade at $11.20.
In contrast, The Real Brokerage (NASDAQ:REAX) delivered an even more impressive performance. Founded in Toronto in 2014, this tech-driven brokerage firm reported a staggering 93.4% year-over-year revenue growth, outpacing analyst expectations by 16.8%. The business also beat EPS and EBITDA estimates, making it the standout performer among its peers.
Despite this remarkable quarter, The Real Brokerage's stock has taken a hit, declining 12% since reporting to trade at $4.36. Is now the time to buy? Our full analysis of the earnings results is available for free.
