The Real Brokerage Inc. (NASDAQ:REAX) Just Reported And Analysts Have Been Lifting Their Price Targets

The investors in The Real Brokerage Inc.'s (NASDAQ:REAX) will be rubbing their hands together with glee today, after the share price leapt 23% to US$4.98 in the week following its first-quarter results. Results overall weren't great; even though revenues of US$201m beat expectations by 18%, statutory losses ballooned to US$0.09 per share, substantially worse than the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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.

See our latest analysis for Real Brokerage

After the latest results, the three analysts covering Real Brokerage are now predicting revenues of US$1.02b in 2024. If met, this would reflect a substantial 30% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 21% to US$0.15. Before this earnings announcement, the analysts had been modelling revenues of US$905.9m and losses of US$0.12 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the top line growth will not be achieved without incremental costs.

The average price target rose 44% to US$6.13, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Real Brokerage at US$6.25 per share, while the most bearish prices it at US$6.00. This is a very narrow spread of estimates, implying either that Real Brokerage is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Real Brokerage's revenue growth is expected to slow, with the forecast 42% annualised growth rate until the end of 2024 being well below the historical 75% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Real Brokerage going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - Real Brokerage has 4 warning signs we think you should be aware of.

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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.