Marcus & Millichap’s second quarter results drew a negative market reaction as profitability missed Wall Street’s expectations despite stronger-than-anticipated revenue growth. Management attributed the revenue gain to accelerating activity in its private client segment, which posted double-digit growth in both revenue and transactions as clients became more realistic on pricing. CEO Hessam Nadji noted, “We’re seeing improvement in loan terms and more lenders quoting on our private client financing assignments as well.” However, ongoing margin pressure and a notable decline in large transaction revenue created headwinds, with management citing the disruptive effects of recent tariff announcements and one-time expense factors as key contributors to the weaker bottom line.

Is now the time to buy MMI? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Marcus & Millichap’s Q2 Earnings Call

• Blaine Matthew Heck (Wells Fargo) asked about the shifting trends in transaction volume by segment, particularly strength in private client versus weakness in large deals. CEO Hessam Nadji explained the improvement stemmed from better client outreach and price alignment, while large deals faced a temporary pause after tariff news.
• Blaine Matthew Heck (Wells Fargo) questioned the decline in commission rates despite higher private client activity. Nadji clarified that a higher proportion of very large ($100 million-plus) deals, which have lower percentage commissions, drove the average rate down.
• Blaine Matthew Heck (Wells Fargo) inquired about the impact and future implications of the tax methodology change. CFO Steve DeGennaro detailed that the shift to a year-to-date method was necessary due to earnings volatility and should normalize by year-end.
• Blaine Matthew Heck (Wells Fargo) sought updates on external growth and acquisition opportunities. Nadji described ongoing discussions with boutique brokerages and advisory firms, noting improved market sentiment and valuations supporting renewed M&A potential.
• Blaine Matthew Heck (Wells Fargo) asked about capital allocation priorities, including share repurchases versus M&A. DeGennaro said buybacks and dividends would continue alongside opportunistic acquisitions, supported by a strong balance sheet.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will closely watch (1) whether private client transaction momentum sustains as market pricing continues to adjust, (2) the pace of recovery in large institutional transactions following recent volatility, and (3) tangible productivity gains from investments in salesforce technology and auction platform expansion. Updates on acquisition opportunities and management’s ability to manage costs as revenue recovers will also be key signposts.

Marcus & Millichap currently trades at $31.19, down from $32.18 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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