Real Brokerage Stock (REAX): An AI-Driven Real Estate Disruptor That’s Cheap Right Now

Real Brokerage Inc. (NASDAQ: REAX) is gaining recognition as a technology-focused real estate company offering brokerage, title, and mortgage services across the U.S. and Canada. With notable financial growth, innovative strategies, and promising market potential, REAX is emerging as a favored investment choice in the real estate sector. However, the stock price has already declined by 35% since its last high in November 2024, making it cheaper right now. This analysis explores the company’s background, financial performance, stock valuation, growth potential, and associated risks.

1. About Real Brokerage (REAX)

Founded in 2014 and headquartered in Miami, Florida, Real Brokerage Inc. operates as a tech-enabled real estate firm disrupting traditional brokerage models. Its segments North American Brokerage, Real Title, and One Real Mortgage offer a comprehensive suite of services designed to streamline real estate transactions.

Real’s innovative tools, including the Real Wallet and an AI-powered virtual concierge, enhance agent efficiency and client experience. This agent-focused, technology first approach has enabled the company to thrive in a competitive industry, gaining a strong foothold in the North American real estate market.

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2. Latest Q3 2024 Financial Performance

Real Brokerage has demonstrated impressive financial growth. In Q3 2024, the company achieved quarterly revenue of $372.49 million, marking a 73.54% year-over-year increase from Q3 2023’s $185.33 million. Its trailing twelve months (TTM) revenue for Q3 2024 reached $1.095 billion, reflecting an 81.37% increase from fiscal 2023’s $689.16 million.

Free cash flow per share has also grown significantly, rising from $0.11 in fiscal 2023 to $0.20 for the TTM ending Q3 2024 an 81.81% improvement. These metrics underscore Real’s ability to effectively manage operations while reinvesting in technology and infrastructure to sustain growth. Consistent revenue and cash flow growth highlight its strong market demand and solid execution.

3. REAX Stock Price Performance and Valuation

REAX has experienced remarkable stock price growth, with its market cap reaching approximately $829 million and shares priced at $4.20, representing a 137.46% increase over the past year. This performance outpaces the S&P 500, which increased by 24.21% during the same period. However, the stock price has declined by 35% since November 2024, making this fast growing stock cheaper than before.

The company’s price-to-sales (P/S) ratio of 0.71 is particularly compelling given its rapid revenue growth, making the stock attractive to growth-oriented investors. It’s P/S also very low compared to its historical P/S making REAX potentially undervalued.

Additionally, the stock has a price-to-free-cash-flow (P/FCF) ratio of 22.04, which is considered low relative to its growth. While the absence of a price-to-earnings (P/E) ratio reflects the company’s focus on reinvestment, the low P/S and P/FCF ratios align with its high-growth trajectory, offering an appealing valuation.

4. REAX Growth Potential

Real Brokerage’s growth prospects remain strong, driven by several key factors:

• Technological Innovation: Tools like the Real Wallet and AI-powered services address inefficiencies in traditional brokerage, providing agents with financial flexibility and enhancing client interactions.
• Diversification: Expansion into title and mortgage services broadens revenue streams and strengthens market position.
• Market Trends: The North American real estate market is increasingly adopting tech-driven solutions, creating opportunities for companies like Real to lead digital transformation in the sector. The global AI in real estate market value is expected to grow at a CAGR of 35% from 2023 to 2030, increasing from $220 billion to $1,803 billion.

With its innovative business model and adaptability, Real Brokerage is well-positioned to capitalize on evolving market dynamics.

5. Risks to Consider

Despite its strong potential, Real Brokerage faces notable risks:

• Profitability Concerns: Heavy investments in technology and marketing could strain profitability if revenue growth slows.
• Market Sensitivity: Economic downturns and interest rate fluctuations may impact transaction volumes and home sales.
• Stock Volatility: The stock price trend is currently in a downtrend and could drop further in the short term.

However, the company’s robust growth, tech-driven approach, and diversified revenue base help mitigate these risks, making it a potentially resilient long-term investment.

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Conclusion

The decline in Real Brokerage (REAX) stock makes it cheaper than before. REAX stock stands out as an attractive opportunity for growth focused investors. Its innovative technology, exceptional financial performance, and expansion into complementary services position it as a leader in the real estate technology space. While risks related to market conditions and volatility exist, Real’s focus on agent support, efficiency, and innovation make it a compelling choice for investors seeking exposure to a transformative player in the real estate sector.