Reflecting On Real Estate Services Stocks’ Q1 Earnings: Opendoor (NASDAQ:OPEN)
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 Opendoor (NASDAQ:OPEN) 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 14 real estate services stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 4.2%. while next quarter's revenue guidance was 4% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and real estate services stocks have held roughly steady amidst all this, with share prices up 2.4% on average since the previous earnings results.
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 $1.18 billion, down 62.1% year on year, topping analysts' expectations by 8.8%. It was a solid quarter for the company, with an impressive beat of analysts' revenue and adjusted EBITDA estimates.
“Our first quarter results exceeded the high end of our guidance across revenue, Contribution Margin, and Adjusted EBITDA. Our product continues to resonate with customers, as we more than doubled our market share year-over-year and continued to deliver industry-leading seller NPS. We entered the second quarter with strong momentum, and we are meaningfully ramping acquisitions in 2024. Led by our operating principles of focus, execution, and results, we remain on track to durably rescale the business in 2024 while delivering Contribution Margin within our target annual range,” said Carrie Wheeler, CEO of Opendoor.
Opendoor delivered the slowest revenue growth of the whole group. The stock is up 5.4% since the results and currently trades at $2.13.
Is now the time to buy Opendoor? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $5.12 billion, up 8.7% year on year, outperforming analysts' expectations by 6.4%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue and earnings estimates.
The stock is up 7.4% since the results and currently trades at $199.
Is now the time to buy JLL? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Anywhere Real Estate (NYSE:HOUS)
Formerly known as Realogy Holdings, Anywhere Real Estate (NYSE:HOUS) is a residential real estate company with a network of brokerages, franchises, and settlement services.
Anywhere Real Estate reported revenues of $1.13 billion, down 0.4% year on year, falling short of analysts' expectations by 1.8%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
Anywhere Real Estate had the weakest performance against analyst estimates in the group. The stock is down 17.2% since the results and currently trades at $4.49.
Read our full analysis of Anywhere Real Estate's results here.
Newmark (NASDAQ:NMRK)
Founded in 1929, Newmark (NASDAQ:NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.
Newmark reported revenues of $546.5 million, up 4.9% year on year, surpassing analysts' expectations by 3.9%. It was a weaker quarter for the company, with full-year revenue guidance missing analysts' expectations.
Newmark had the weakest full-year guidance update among its peers. The stock is up 4.4% since the results and currently trades at $10.41.
Read our full, actionable report on Newmark here, it's free.
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 $225.5 million, up 5.3% year on year, surpassing analysts' expectations by 3.6%. It was a decent quarter for the company, with revenue guidance for next quarter exceeding analysts' expectations. On the other hand, its operating margin missed and its number of brokerage transactions fell short of Wall Street's estimates.
The stock is down 5.1% since the results and currently trades at $6.05.
Read our full, actionable report on Redfin here, it's free.
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