As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the real estate services industry, 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 13 real estate services stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 5.5% while next quarter’s revenue guidance was 1.2% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 22.5% 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 $554 million, up 16.9% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ adjusted operating income estimates.
The stock is down 27.8% since reporting and currently trades at $60.54.
Read our full report on Zillow here, it’s free.
Best Q4: 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 $350.6 million, up 93.4% year on year, outperforming analysts’ expectations by 16.8%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The Real Brokerage delivered the fastest revenue growth among its peers. The stock is down 13.2% since reporting. It currently trades at $4.30.
Is now the time to buy The Real Brokerage? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Offerpad (NYSE:OPAD)
Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE:OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.
Offerpad reported revenues of $174.3 million, down 27.5% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Offerpad delivered the slowest revenue growth in the group. As expected, the stock is down 35% since the results and currently trades at $1.41.
Read our full analysis of Offerpad’s results here.
Redfin (NASDAQ:RDFN)
Founded by a former medical school student, electrical engineer, and Amazon data engineer, Redfin (NASDAQ:RDFN) is a real estate company offering brokerage services through an online platform.
Redfin reported revenues of $244.3 million, up 12% year on year. This number surpassed analysts’ expectations by 0.7%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.
The stock is up 14.1% since reporting and currently trades at $8.72.
Read our full, actionable report on Redfin here, it’s free.
JLL (NYSE:JLL)
Founded in 1999 through the merger of Jones Lang Wootton and LaSalle Partners, JLL (NYSE:JLL) is a company specializing in real estate advisory and investment management services.
JLL reported revenues of $6.81 billion, up 15.8% year on year. This print topped analysts’ expectations by 1.4%. Zooming out, it was a mixed quarter as it also produced a decent beat of analysts’ EPS estimates but a miss of analysts’ Capital Markets revenue estimates.
The stock is down 25.6% since reporting and currently trades at $209.50.
Read our full, actionable report on JLL here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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