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HOUS

Anywhere Real Estate NYSE:HOUS Stock Report

Last Price

US$8.32

Market Cap

US$951.6m

7D

-9.3%

1Y

-55.8%

Updated

26 Sep, 2022

Data

Company Financials +
HOUS fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance1/6
Financial Health2/6
Dividends0/6

HOUS Stock Overview

Anywhere Real Estate Inc., through its subsidiaries, provides residential real estate services in the United States and internationally.

Anywhere Real Estate Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Anywhere Real Estate
Historical stock prices
Current Share PriceUS$8.32
52 Week HighUS$21.03
52 Week LowUS$8.09
Beta2.32
1 Month Change-22.24%
3 Month Change-15.62%
1 Year Change-55.77%
3 Year Change24.55%
5 Year Change-75.08%
Change since IPO-75.67%

Recent News & Updates

Sep 12
Here's Why Anywhere Real Estate (NYSE:HOUS) Has A Meaningful Debt Burden

Here's Why Anywhere Real Estate (NYSE:HOUS) Has A Meaningful Debt Burden

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Aug 06

Anywhere Real Estate: A Successful Turnaround Seems Unlikely

After a decade of little earnings growth, lots of debt and earnings multiple compression that has taken its stock down 80% since 2013, Anywhere Real Estate is attempting a turnaround. In this situation, I find a successful long-term turnaround to be unlikely. Although management has laid out a path for growth and cost cuts, the company over-earned in 2021, so the stock isn't as cheap as it looks. This is also not a great macro environment to own highly leveraged turnaround businesses that operate in the residential real estate industry. Turnaround stocks are always tempting because they usually look cheap and the upside is big if the turnaround is successful. But inherent to the fact that it’s a turnaround is the fact that there was a long-term business decline or stagnation up to the point of analysis. This means that generally growth, tailwinds, and a proven track record are not on your side if you’re an investor in the company. There’s also usually a high net leverage ratio. Anywhere Real Estate Inc. (HOUS) falls into this category. The stock is down 80% from its peak in 2013. Revenue is up about 50% since then but earnings are flat, so most of the decline can be attributed to multiple compression. Anywhere Real Estate EV/EBIT (2012-2022) (Seeking Alpha) In 2013 the stock reached a peak EV/EBIT multiple of about 40 with $525 million in EBIT and a stock price of $50. Today the EV/EBIT multiple is about 9, 2021 EBIT was $600 million and the stock trades at $10. This paints of picture of the market slowly losing faith in the company over the course of a decade as margins dropped due to increased competitiveness in the industry, all while growth failed to make up for it. That brings us to where we are now. What does the future hold for Anywhere Real Estate? Along with the rebrand from Realogy, management has laid out a path to sustained growth and increased profitability, the main points being more cost cutting measures to improve profitability and “high impact technology” that improves agent efficiency. This is a nice plan in theory but I wouldn't bet on this turnaround to be successful over the long run. I think this is a business in decline and that the stock will continue to reflect this decline. If I'm right, that will all be apparent over the next 5-10 years. But could there be short term upside? The market seems to be pricing in a housing crash scenario for some stocks (thinking mainly about home builders and housing supply companies) and this could be leaking over the brokerage industry. The current slowdown will likely continue but I don’t think the “housing bubble burst 2.0” scenario will play out. Even so, the market is fearful of a housing market crash and Anywhere Real Estate's stock could be difficult to hold especially if investors don't believe in the long term turnaround plan. The Turnaround Plan Management has been emphasizing cost reductions as the main way they will increase profitability. In the Q2 2022 press release they highlight up to $140 million in potential cost savings for the year. Cost savings are good but the counterweight to this is that the brokerage industry is getting much more competitive. As that trend continues, the real estate transaction commission split will become even more favorable for the agent. There isn’t much loyalty when it comes to choosing a brokerage; agents will go where they can make the most money. The commission split isn’t the only factor in that equation but it is a big one. Along with the cost savings, Anywhere highlights its “high impact technology” that makes agents more efficient. I’m not an agent so I'm not expert on the different real estate platforms and the tech that goes into them. But this is the type of statement that I can’t trust at face value. In fact, given how software is constantly evolving and improving I think this statement necessarily can’t be true for a long period of time as the business is cutting costs rather than aggressively investing in its platform. This would be less of a concern if this was a low churn type of business but as I mentioned, agents will always go to the brokerage where they can make the most money. If Anywhere’s tech begins to lag behind as others brokerages invest heavily into their technology over the next few years, agents will leave. Financials Like most turnaround stocks, Anywhere Real Estate looks cheap. It’s currently trading at an EV/EBIT multiple of 9 and compared to other publicly traded brokerages that have much higher earnings multiples or are unprofitable, this looks like a steal. But it’s worth digging a little deeper. First, the business over-earned in 2021. The multiple will increase over the course of the next two quarters because earnings will decline in the second half of the year just as earnings declined in the first half. The EV/EBIT multiple could be closer to 12-15 which is just about stock's average from 2015-2020. Second, it’s interesting to check how these earnings translate to cash flow. In the first half of 2022, there were working capital changes that affected cash from operations. This is not too concerning as I expect these to normalize in short time. What stands out is that capital expenditures are relatively high. With a closer look we can see that this is because property and equipment is comprised mainly of capitalized software. This makes GAAP earnings look better even though free cash flow and total earnings over time would be unchanged. If the software costs were instead expensed in the income statement the current EV/EBIT ratio would not look quite as good. This would not affect the economics of the business but it's something to keep in mind. Anywhere Real Estate 2021 PPE (Anywhere Real Estate 2021 10-K) Finally, this isn’t the right macro environment to own highly leveraged turnaround stocks especially if the business operates in the real estate industry. I did say that I don’t think there will be a big housing market crash but the equity market is being very skittish with housing market data. Just take a look at the valuations of the big homebuilding companies. D.R. Horton, Inc. (DHI) is trading at an EV/EBIT of around 4, below the lows of the 2020 covid crash. Businesses in cyclical industries see a range of earnings multiples depending on which part of the cycle it's in, but with this type of valuation the market is pricing these businesses for a huge earnings crash.

Shareholder Returns

HOUSUS Real EstateUS Market
7D-9.3%-11.1%-6.9%
1Y-55.8%-47.7%-23.7%

Return vs Industry: HOUS underperformed the US Real Estate industry which returned -46.1% over the past year.

Return vs Market: HOUS underperformed the US Market which returned -23% over the past year.

Price Volatility

Is HOUS's price volatile compared to industry and market?
HOUS volatility
HOUS Average Weekly Movement7.5%
Real Estate Industry Average Movement7.6%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: HOUS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: HOUS's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20069,748Ryan Schneiderhttps://www.anywhere.re

Anywhere Real Estate Inc., through its subsidiaries, provides residential real estate services in the United States and internationally. The company operates through three segments: Anywhere Brands, Anywhere Advisors, and Anywhere Integrated Services. The Anywhere Brands segment franchises the Century 21, Coldwell Banker, Coldwell Banker Commercial, Corcoran, ERA, Sotheby's International Realty, and Better Homes and Gardens Real Estate brand names.

Anywhere Real Estate Inc. Fundamentals Summary

How do Anywhere Real Estate's earnings and revenue compare to its market cap?
HOUS fundamental statistics
Market CapUS$951.61m
Earnings (TTM)US$272.00m
Revenue (TTM)US$7.94b

3.5x

P/E Ratio

0.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HOUS income statement (TTM)
RevenueUS$7.94b
Cost of RevenueUS$4.89b
Gross ProfitUS$3.05b
Other ExpensesUS$2.78b
EarningsUS$272.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.38
Gross Margin38.45%
Net Profit Margin3.43%
Debt/Equity Ratio136.9%

How did HOUS perform over the long term?

See historical performance and comparison