William Blair initiated research coverage of The Real Brokerage Inc. (REAX $1.31), a cloud-based residential brokerage focused on mobile technology and transaction efficiency.
Analyst Stephen Sheldon estimated that the company would generate $840 million in revenue in 2024, up from a projected $575 million in 2023.
“Real Brokerage is a residential real estate brokerage that provides a cloud-based, mobile-first technology platform to its agents,” said Sheldon. “Through this platform, agents can efficiently manage all aspects of their individual businesses, including managing each real estate transaction from pipeline through the eventual commission payment, as well as all aspects of their individual businesses. Real does not maintain physical locations, and supports all aspects of its business operations virtually, through agent support, training, transaction management, marketing, etc., supporting a highly scalable and increasingly profitable operation. Real’s attractive agent compensation model, paired with an efficiency-focused technology platform, has allowed it to grow from around 1,000 agents ending 2019 to over 10,000 agents in March 2023, which is up 120% from the prior year.
“The U.S. residential real estate market is large, with total annual brokerage commissions of roughly $100 billion and a pool of close to 2 million total agents,” added Sheldon. “Real believes its total addressable market could exceed $215 billion when factoring in ancillary solutions like mortgage, title/escrow, and other services. Therefore, this is a large market with ample opportunities to grow for those that provide value and sources of differentiation. In addition, the home buying/selling process is highly complex for consumers, particularly first-time homebuyers, with numerous parties and steps involved. Real is one of the few players we have seen attempting to truly simplify the process for consumers by providing more visibility throughout the transaction and pulling all relevant parties into its platform.”
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Current Ratings Distribution (as of 6/1/23)
Outperform (Buy): 74%
Market Perform (Hold): 26%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 8%
Market Perform (Hold): 3%
Underperform (Sell): 50%
* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.
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