Results: The Real Brokerage Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

The Real Brokerage Inc. (NASDAQ:REAX) just released its second-quarter report and things are looking bullish. Real Brokerage delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$541m-12% above indicated-andUS$0.01-300% above forecasts- respectively This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Real Brokerage after the latest results.

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After the latest results, the four analysts covering Real Brokerage are now predicting revenues of US$1.89b in 2025. If met, this would reflect a decent 17% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 62% to US$0.023. Before this latest report, the consensus had been expecting revenues of US$1.79b and US$0.018 per share in losses. So it's pretty clear the analysts have mixed opinions on Real Brokerage even after this update; although they upped their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

See our latest analysis for Real Brokerage

It will come as no surprise that expanding losses caused the consensus price target to fall 5.0% to US$6.33with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Real Brokerage, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$6.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Real Brokerage is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Real Brokerage's revenue growth is expected to slow, with the forecast 37% annualised growth rate until the end of 2025 being well below the historical 60% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. So it's pretty clear that, while Real Brokerage's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Real Brokerage's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Real Brokerage going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Real Brokerage (including 1 which is a bit concerning) .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.