The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Zillow (NASDAQ: ZG) and the rest of the real estate services stocks fared in Q1.

Technology has been a double-edged sword in real estate services. On the one hand, internet listings are effective at disseminating information far and wide, casting a wide net for buyers and sellers to increase the chances of transactions. On the other hand, digitization in the real estate market could potentially disintermediate key players like agents who use information asymmetries to their advantage.

The 13 real estate services stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 0.8% below.

Luckily, real estate services stocks have performed well with share prices up 47.4% on average since the latest earnings results.

Zillow (NASDAQ: ZG)

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.

Zillow reported revenues of $598 million, up 13% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.

Interestingly, the stock is up 17.3% since reporting and currently trades at $77.87.

Is now the time to buy Zillow? Access our full analysis of the earnings results here, it’s free.

Best Q1: The Real Brokerage (NASDAQ: REAX)

Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ: REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.

The Real Brokerage reported revenues of $354 million, up 76.3% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

The Real Brokerage scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.8% since reporting. It currently trades at $4.38.

Is now the time to buy The Real Brokerage? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: eXp World (NASDAQ: EXPI)

Founded in 2009, eXp World (NASDAQ: EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.

eXp World reported revenues of $954.9 million, up 1.3% year on year, falling short of analysts’ expectations by 4%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 30.3% since the results and currently trades at $11.30.

Read our full analysis of eXp World’s results here.

Compass (NYSE: COMP)

Fueled by its mission to replace the "paper-driven, antiquated workflow" of buying a house, Compass (NYSE: COMP) is a digital-first company operating a residential real estate brokerage in the United States.

Compass reported revenues of $1.36 billion, up 28.7% year on year. This result lagged analysts' expectations by 4.6%. Overall, it was a softer quarter as it also logged a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EPS estimates.

Compass had the weakest performance against analyst estimates among its peers. The stock is down 5.2% since reporting and currently trades at $7.31.

Read our full, actionable report on Compass here, it’s free.

Newmark (NASDAQ: NMRK)

Founded in 1929, Newmark (NASDAQ: NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.

Newmark reported revenues of $665.5 million, up 21.8% year on year. This print surpassed analysts’ expectations by 8.9%. It was a strong quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.

Newmark had the weakest full-year guidance update among its peers. The stock is up 18.3% since reporting and currently trades at $13.07.

Read our full, actionable report on Newmark here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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