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RE/MAX Holdings, Inc. ((RMAX - Free Report) ) is a global real estate firm and one of the largest franchisors in the real estate industry. RMAX stock has continued to suffer as the company’s earnings outlook tumbled over the last several years.
RMAX 101
RE/MAX franchises real estate brokerages globally under the RE/MAX brand and mortgage brokerages in the U.S. under Motto Mortgage. The firm also sells supplementary products and services to our franchise networks, including loan processing services.
RE/MAX boasts that it has more than 140,000 agents in over 9,000 offices across over 110 countries. That said, RE/MAX and Motto Mortgage are 100% franchised. The company’s business revolves around providing technology, training, and marketing.
Image Source: Zacks Investment Research
RE/MAX posted strong growth in three out of the past five years, including 33% revenue expansion in the pre-Covid 2019 period and 24% in 2021.
RE/MAX’s revenue fell 8% in 2023 and its adjusted earnings tumbled 38%. The firm has been impacted by the slowing housing market, driven by higher mortgage rates and a difficult to compete against stretch of pull-forward expansion during the Covid boom.
RE/MAX’s adjusted earnings are projected to fall another 7% in 2024 on 5% lower sales amid rough macro conditions. RE/MAX’s earnings outlook has faded fast over the last several years, including recent negativity.
For instance, RE/MAX’s Q1 FY24 consensus EPS estimate is down 17% in the last several months, with its most accurate/recent EPS estimate slightly below that beaten-down level.
Image Source: Zacks Investment Research
The company’s long-term outlook likely remains strong, driven by larger demographic trends. The firm is also optimistic about the near term future. "Looking ahead to 2024, we believe there are many reasons to be optimistic – encouraging interest rate trends, improving customer sentiment, and ongoing pent-up demand bode well for progressively better housing market performance moving forward,” CEO Erik Carlson (who took over in late 2023) said in prepared Q4 remarks.
Bottom Line
RE/MAX’s downward earnings revisions help it earn a Zacks Rank #5 (Strong Sell) at the moment. On top of that the company’s Real Estate – Operations segment lands in the bottom 13% of over 250 Zacks industries.
Wall Street is skeptical of the stock at the moment, with four of the six brokerage recommendations Zacks has at “Holds,” alongside two “Sells.” The stock is down over 80% in the last five years, including a 60% downturn in the past 12 months. This fall is part of an even larger decline that began in 2017.
RE/MAX will report its earnings results on Thursday, May 2.
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Bear of the Day: RE/MAX Holdings, Inc. (RMAX)
RE/MAX Holdings, Inc. ((RMAX - Free Report) ) is a global real estate firm and one of the largest franchisors in the real estate industry. RMAX stock has continued to suffer as the company’s earnings outlook tumbled over the last several years.
RMAX 101
RE/MAX franchises real estate brokerages globally under the RE/MAX brand and mortgage brokerages in the U.S. under Motto Mortgage. The firm also sells supplementary products and services to our franchise networks, including loan processing services.
RE/MAX boasts that it has more than 140,000 agents in over 9,000 offices across over 110 countries. That said, RE/MAX and Motto Mortgage are 100% franchised. The company’s business revolves around providing technology, training, and marketing.
Image Source: Zacks Investment Research
RE/MAX posted strong growth in three out of the past five years, including 33% revenue expansion in the pre-Covid 2019 period and 24% in 2021.
RE/MAX’s revenue fell 8% in 2023 and its adjusted earnings tumbled 38%. The firm has been impacted by the slowing housing market, driven by higher mortgage rates and a difficult to compete against stretch of pull-forward expansion during the Covid boom.
RE/MAX’s adjusted earnings are projected to fall another 7% in 2024 on 5% lower sales amid rough macro conditions. RE/MAX’s earnings outlook has faded fast over the last several years, including recent negativity.
For instance, RE/MAX’s Q1 FY24 consensus EPS estimate is down 17% in the last several months, with its most accurate/recent EPS estimate slightly below that beaten-down level.
Image Source: Zacks Investment Research
The company’s long-term outlook likely remains strong, driven by larger demographic trends. The firm is also optimistic about the near term future. "Looking ahead to 2024, we believe there are many reasons to be optimistic – encouraging interest rate trends, improving customer sentiment, and ongoing pent-up demand bode well for progressively better housing market performance moving forward,” CEO Erik Carlson (who took over in late 2023) said in prepared Q4 remarks.
Bottom Line
RE/MAX’s downward earnings revisions help it earn a Zacks Rank #5 (Strong Sell) at the moment. On top of that the company’s Real Estate – Operations segment lands in the bottom 13% of over 250 Zacks industries.
Wall Street is skeptical of the stock at the moment, with four of the six brokerage recommendations Zacks has at “Holds,” alongside two “Sells.” The stock is down over 80% in the last five years, including a 60% downturn in the past 12 months. This fall is part of an even larger decline that began in 2017.
RE/MAX will report its earnings results on Thursday, May 2.