Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Compass (NYSE: COMP) and the best and worst performers in the real estate services industry.
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 32.5% on average since the latest earnings results.
Compass (NYSE: COMP)
Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE: COMP) is a digital-first company operating a residential real estate brokerage in the United States.
Compass reported revenues of $2.06 billion, up 21.1% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 28.1% since reporting and currently trades at $9.28.
Read our full report on Compass 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 an impressive 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 30.1% since reporting. It currently trades at $5.34.
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 1.1% since the results and currently trades at $10.96.
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 print surpassed analysts’ expectations by 4.2%. Zooming out, 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 64.1% since reporting and currently trades at $4.16.
Read our full, actionable report on Opendoor here, it’s free.
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 number beat analysts’ expectations by 1.2%. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.
The stock is down 1.5% since reporting and currently trades at $80.26.
Read our full, actionable report on Zillow here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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