Global Digital Transformation Will Redefine Real Estate Services

Key Takeaways

• Accelerated international expansion and digital transformation position eXp for sustained growth by leveraging a scalable, tech-driven model that attracts top agents and adapts to remote work trends.
  
• Investment in proprietary AI, automation, and agent-focused digital tools promotes operating efficiencies, stronger agent retention, and scalable margins through increased productivity and lower acquisition costs.
  
• Macroeconomic, regulatory, and competitive pressures threaten eXp's profitability as rising costs, agent attrition, and eroding tech differentiation challenge revenue, margins, and future growth.

Catalysts

Provides cloud-based real estate brokerage services for residential homeowners and homebuyers.

• The company's accelerated international expansion—achieving 103% YoY revenue growth outside North America, record-breaking launches in new markets, and a scalable, tech-driven playbook—positions eXp to benefit from the increasing globalization of real estate services and the expanding global labor pool, supporting potential sustained future top-line growth.
  
• Heavy, ongoing investment in proprietary AI and automation—now enabling “citizen developers” to quickly create localized tools and automate high-volume workflows—should unlock future operating efficiencies and margin expansion as technology-driven processes lower SG&A and scale the virtual business model.
  
• eXp’s platform-centric, cloud-based brokerage—with immersive virtual infrastructure and agent-focused value stack—continues to gain traction among high-performing agents and teams, capitalizing on the trend toward digital transformation and remote work, and creating a lower-cost, more scalable revenue base that can improve earnings leverage over time.
  
• The new co-sponsorship program strengthens agent recruitment incentives and collaboration, directly supporting agent network growth and retention at a lower acquisition cost, which is likely to enhance both future revenue and gross margin as the business scales.
  
• Increased adoption of digital solutions and platform tools by agents (e.g., Canva, eXp University, virtual collaboration) and the continued shift of independent brokerages to the eXp model reinforce industry-wide digitalization, driving greater platform stickiness and higher per-agent productivity, both of which can drive higher transaction volume and bolster top-line revenue growth.

eXp World Holdings Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming eXp World Holdings's revenue will grow by 5.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from -0.3% today to 1.1% in 3 years time.
• Analysts expect earnings to reach $58.1 million (and earnings per share of $0.38) by about May 2028, up from $-14.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 34.8x on those 2028 earnings, up from -89.8x today. This future PE is greater than the current PE for the US Real Estate industry at 18.3x.
• Analysts expect the number of shares outstanding to grow by 1.58% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.38%, as per the Simply Wall St company report.

eXp World Holdings Future Earnings Per Share Growth

Risks

• Persistent macroeconomic headwinds in the U.S. housing market, including potential recession risk, consumer confidence concerns, and uncertainty around interest rates, could limit transaction volumes and compress commission-derived revenue, especially as North America remains the primary profit engine for eXp.
  
• Increased investments in technology, AI, and agent value stack tools are elevating operating expenses and driving margin compression, as seen in declining gross margin and adjusted EBITDA; if revenue growth does not keep pace, this could put sustained pressure on net margins and overall profitability.
  
• Agent headcount has declined, with gains in productivity concentrated in top-producing teams, but continued attrition among low-transaction agents combined with a longer onboarding cycle for large teams may slow net agent growth and risk future transaction volumes, impacting both revenue and recruiting leverage.
  
• Legal and regulatory changes affecting U.S. real estate practices—such as NAR settlements, DOJ scrutiny, new disclosure rules, and shifting CCP requirements—pose ongoing uncertainty around compensation structures and may challenge eXp’s ability to maintain its current revenue share, commission, and agent attraction models, presenting downside risk to margins and earnings.
  
• The proliferation of AI-powered, digital-first competitors and greater migration of the industry toward virtual solutions may erode eXp’s technological differentiation and value proposition, leading to increased agent churn, intensified competition for productive agents, and pressure on revenue retention and gross margins.

Valuation

• The analysts have a consensus price target of $10.0 for eXp World Holdings based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.4 billion, earnings will come to $58.1 million, and it would be trading on a PE ratio of 34.8x, assuming you use a discount rate of 7.4%.
  
• Given the current share price of $8.04, the analyst price target of $10.0 is 19.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.