Core Viewpoint - Recent home sales reports show a slight increase, providing some optimism for the real estate sector, but one month of positive data is insufficient to indicate a full recovery after several months of decline [1] Real Estate Sector Trends - A significant trend is emerging that could create long-term growth opportunities, particularly in the real estate services sector, focusing on leasing and transactional services [2] - Zillow Group, SoFi Technologies, and RE/MAX Holdings are identified as potential beneficiaries of this trend, with expectations of double-digit upside in the coming quarters as the U.S. housing market enters a growth cycle [3] Zillow Group Insights - Zillow acts as a middleman in real estate transactions and leasing, with its financial performance closely tied to the cyclicality of these markets [4] - The company is increasingly focusing on the rental segment due to high price-to-income ratios and rising mortgage rates, which have dampened demand for new homes [5] - Zillow's rental division is expected to capture a larger share of net revenue as the rental market expands, with 36% of Americans currently renting, a 50% increase from pre-COVID levels [7] Stock Performance and Projections - Analysts at Jefferies Financial Group have set a price target of $90 for Zillow stock, indicating a potential upside of 10% from current levels, following a 110% rally over the past year [9] - The stock has gained institutional support, with FMC LLC increasing its holdings by 179.5%, now owning 2.2% of the company, reflecting confidence in Zillow's long-term prospects [3] SoFi Technologies Outlook - SoFi Technologies could benefit from a rebound in the mortgage market, which is currently at a 1996 low, with potential for significant growth if market conditions improve [10] - The company's short interest has decreased by 10.2% recently, indicating a shift from bearish to bullish sentiment among investors [10] - State Street Corp. has increased its holdings in SoFi by 1.7%, reflecting optimism about future growth, with EPS forecasts predicting a doubling from $0.05 to $0.10 per share over the next 12 months [11][12] RE/MAX Holdings Potential - RE/MAX stock has rallied 45% over the past year and is positioned to benefit from trends in both the rental and buying markets [13] - The stock trades at a low price-to-book ratio of 0.6, offering a 40% discount to its book value, which could attract investors [15] - With 93.2% institutional ownership, RE/MAX is well-positioned to capitalize on the momentum generated by Zillow and the overall market [14]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $78.5 million, with adjusted EBITDA of $27.3 million, reflecting a 2% increase year-over-year [25] - Adjusted EBITDA margin improved to 34.8%, an increase of 190 basis points compared to Q3 2023 [25] - Revenue excluding marketing funds was $58.4 million, a decrease of 3.3% year-over-year, primarily due to negative organic growth of 3% and adverse foreign currency movements of 0.3% [26] Business Line Data and Key Metrics Changes - The U.S. agent count experienced a decline, contributing to negative organic growth, although broker fee revenue increased due to higher sales prices [26] - International agent count rose nearly 6% year-over-year, reaching over 67,000 agents, with notable growth in Brazil and Argentina [16] - Motto Mortgage faced challenges with a slight decline in open offices for the first time, attributed to slowed franchise sales and terminations [22] Market Data and Key Metrics Changes - The real estate industry is navigating through uncertain times, with heightened attention on the role of professional agents following the NAR settlement [10] - The Federal Reserve's recent 50 basis point cut was welcomed, although rising mortgage rates in October may soften demand trends [14] Company Strategy and Development Direction - The company is focused on improving agent count and enhancing customer experience through initiatives like the MAX/Tech Lead Concierge program [15][19] - RE/MAX aims to capitalize on market share gains and improve productivity among agents, particularly in the U.S. and Canada [84] - The company supports transparency in real estate transactions and prioritizes consumer interests over practices that benefit a few [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of interest rates and the potential for growth in 2025, despite current challenges [14][15] - The company anticipates a lower fourth quarter performance due to financial support extended to affiliates affected by hurricanes [30] - Management emphasized the importance of agent stabilization and growth as a major objective moving forward [15] Other Important Information - The company has made significant investments in its digital assets, viewing monetization as a low-risk, high-reward opportunity [21] - Cost management efforts have led to a decrease in selling, operating, and administrative expenses by 16.6% year-over-year [27] Q&A Session Summary Question: Insights on MAX/Tech Lead Concierge program - Management discussed the program's potential economics and the low investment required for initial rollout, emphasizing improved customer and agent experiences [34][35][38] Question: Focus on cost management and operational efficiency - Management highlighted prudent spending and ongoing efforts to drive efficiencies while maintaining a growth mindset [40][41][43] Question: Franchise sales and agent count growth - Management noted a cautious market with a wait-and-see attitude, but expressed optimism about future conversions and franchise sales [45][46][49] Question: Buy-side commissions and agent support - Management reported negligible changes in average rates and emphasized the importance of agent education and value articulation [64][66] Question: Franchisee credit and Motto performance - Management indicated continued strength in franchisee credit and optimistic signs in mortgage franchise sales despite challenges [69][72] Question: Seasonal trends in agent counts - Management explained that agent counts typically follow existing home sales, with Q4 and Q1 being slower periods [77] Question: Trends in agent departures and international growth - Management noted that productivity gains among existing agents are offsetting losses from lower productivity agents, while international growth is driven by market share gains [82][84]

RE/MAX Holdings, Inc. Third Quarter 2024 Earnings November 1, 2024 Forward-Looking Statements 1 This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," "anticipate," "may," "will," "would" and other similar words and expressions that predict ...

Core Insights - RE/MAX reported revenue of $78.48 million for Q3 2024, a year-over-year decline of 3.4%, with EPS of $0.38 compared to $0.40 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $78.64 million, resulting in a surprise of -0.20%, while the EPS exceeded the consensus estimate of $0.36 by 5.56% [1] Revenue Breakdown - Marketing Funds fees revenue was $20.10 million, exceeding the average estimate of $19.83 million, but reflecting a year-over-year decline of 3.6% [3] - Continuing franchise fees revenue was $30.80 million, slightly below the average estimate of $31.03 million, with a year-over-year decline of 3.3% [3] - Franchise sales and other revenue was reported at $4.70 million, significantly lower than the estimated $5.39 million, marking a year-over-year decline of 19.4% [3] - Broker fees revenue reached $14.92 million, surpassing the average estimate of $14.09 million, with a year-over-year increase of 4.6% [3] - Annual dues revenue was $7.97 million, below the average estimate of $8.29 million, reflecting a year-over-year decline of 5.8% [3] Stock Performance - Over the past month, RE/MAX shares have returned -1.1%, contrasting with the Zacks S&P 500 composite's +1% change [4] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential outperformance against the broader market in the near term [4]

Core Viewpoint - RE/MAX reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, but down from $0.40 per share a year ago, indicating a 5.56% earnings surprise [1][2] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - RE/MAX's revenues for the quarter ended September 2024 were $78.48 million, missing the Zacks Consensus Estimate by 0.20%, and down from $81.22 million year-over-year [2] - The company has topped consensus revenue estimates two times over the last four quarters [2] Group 2: Stock Performance and Outlook - RE/MAX shares have declined approximately 7.7% since the beginning of the year, contrasting with the S&P 500's gain of 21.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.29 on revenues of $76.17 million, and $1.28 on revenues of $311.4 million for the current fiscal year [7] Group 3: Industry Context - The Real Estate - Operations industry, to which RE/MAX belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Revenue Performance - Total revenue for Q3 2024 was $78.5 million, a decrease of 3.4% compared to $81.2 million in Q3 2023[1][4] - Revenue excluding Marketing Funds was $58.4 million, down 3.3% year-over-year, driven by negative organic growth of 3.0% and adverse foreign currency movements of 0.3%[1][4] - The company expects Q4 2024 revenue in the range of $71.0 million to $76.0 million, including Marketing Funds revenue of $18.5 million to $20.5 million[1][15] - For the full year 2024, revenue is expected to be between $306.0 million and $311.0 million, revised from previous estimates[1][16] - Continuing franchise fees decreased to $30,798,000 in Q3 2024 from $31,834,000 in Q3 2023, representing a decline of 3.2%[25] Profitability - Adjusted EBITDA increased by 2.0% to $27.3 million, with an Adjusted EBITDA margin of 34.8%[1][9] - Operating income for Q3 2024 was $15,211,000, compared to an operating loss of $20,998,000 in Q3 2023[25] - Net income attributable to RE/MAX Holdings was $1.0 million, compared to a net loss of $59.5 million in Q3 2023[1][8] - The company reported a basic earnings per share of $0.05 for Q3 2024, compared to a loss per share of $(3.28) in Q3 2023[26] - Net income for the nine months ended September 30, 2024, was $3,997 thousand, a significant improvement from a net loss of $80,107 thousand for the same period in 2023[28] Expenses and Liabilities - Total operating expenses decreased by 38.1% to $63.3 million, primarily due to a $55.0 million settlement recorded in Q3 2023[1][6] - Total liabilities decreased to $640,412,000 as of September 30, 2024, down from $653,211,000 at the end of 2023[27] Agent Count and Market Presence - Total agent count increased by 174 agents, or 0.1%, to 145,483 agents, while U.S. and Canada combined agent count decreased by 4.4% to 78,201 agents[1][3] - The total agent count in the U.S. and Canada decreased to 78,201 as of September 30, 2024, down from 81,782 a year earlier, indicating a decline of approximately 4.5%[29] - The company reported a total of 67,282 agents outside the U.S. and Canada as of September 30, 2024, an increase from 63,527 a year earlier, marking a growth of approximately 5.5%[29] Cash Flow and Financial Health - Cash provided by operating activities for the nine months ended September 30, 2024, was $42,867 thousand, compared to $19,625 thousand for the same period in 2023, representing a year-over-year increase of 118.4%[28] - The company’s cash, cash equivalents, and restricted cash increased to $156,378 thousand as of September 30, 2024, compared to $120,813 thousand at the end of the previous year[28] - Total cash flow from operations for September 2024 was $42,867,000, compared to $19,625,000 in September 2023, representing a significant increase of 118.4%[34] Future Outlook and Strategy - The company is optimistic about future interest rates and plans to enhance technology and customer experience[23] - RE/MAX Holdings is focused on operational efficiencies and business optimization to improve customer experience[23] - The company aims to finish the year with positive momentum and is exploring new revenue opportunities[23] Adjusted Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2024, was $27,290 thousand, compared to $26,748 thousand for the same period in 2023, reflecting an adjusted EBITDA margin of 34.8%[30] - Adjusted free cash flow for September 2024 was $35,087,000, up from $27,598,000 in September 2023, indicating a growth of 27.1%[34] - Adjusted free cash flow as a percentage of Adjusted EBITDA was 47.2% in September 2024, compared to 37.6% in September 2023, indicating improved efficiency[34]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, incl ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: RE/MAX (RMAX) Analysis - RE/MAX (RMAX) has shown a four-week price change of 2.4%, indicating growing investor interest [4] - Over the past 12 weeks, RMAX stock has gained 49.5%, with a beta of 1.37, suggesting it moves 37% more than the market [5] - RMAX has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings and Valuation - RMAX has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors and drive prices higher [7] - The stock is currently trading at a Price-to-Sales ratio of 0.73, suggesting it is undervalued at 73 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides RMAX, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify winning stock picks based on various investing styles [9]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional va ...

RE/MAX (RMAX) shares rallied 17.3% in the last trading session to close at $12.91. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.6% gain over the past four weeks. The increased investor optimism in the stock can be attributed to the favorable operating environment. This franchisor of residential real estate brokerages is expected to post quarterly earnings of $0.35 per share in its upcoming report, which ...