Newmark Group, Inc. (NASDAQ: NMRK)

Sector: Real Estate Industry: Real Estate Services CIK: 0001690680
Market Cap 3.31 Bn
P/B 2.64
P/E 5.54
P/S 1.31
ROIC (Qtr) 3.09
Div Yield % 0.40
Rev 1y % (Qtr) 25.88
Total Debt (Qtr) 2.56 Bn
Debt/Equity (Qtr) 1.87

About

Newmark Group, Inc., often referred to as Newmark, operates in the commercial real estate industry, offering a wide range of integrated services and products to meet the needs of its clients. The company generates revenue through commissions on leasing and capital markets transactions, consulting and technology user fees, property and facility management fees, and mortgage origination and loan servicing fees. Newmark's main business activities involve providing commercial real estate services to large institutional investors, global corporations,...

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Price action

Investment thesis

Bull case

  • Cash position of 338.77M provides exceptional 10.44x coverage of minority interest expenses 32.45M, indicating strong liquidity.
  • Free cash flow of (69.64M) provides excellent 3.26x coverage of dividends (21.39M), indicating sustainable shareholder returns.
  • Short-term investments of 1.40B provide solid 3.58x coverage of other current liabilities 391.03M, indicating strong liquidity.
  • Robust tangible asset base of 4.63B provides 65.72x coverage of working capital 70.42M, indicating strong operational backing.
  • Tangible assets of 4.63B provide robust 11.83x coverage of other current liabilities 391.03M, indicating strong asset backing.

Bear case

  • Operating cash flow of (43.94M) barely covers its investment activities of (136.09M), with a coverage ratio of 0.32, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of (43.94M) shows concerning coverage of stock compensation expenses of 275.33M, with a -0.16 ratio indicating potential earnings quality issues.
  • Short-term investments of 1.40B significantly exceed cash reserves of 338.77M, which is 4.13x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Free cash flow of (69.64M) provides weak coverage of capital expenditures of 25.70M, with a -2.71 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (43.94M) provides minimal -0.99x coverage of tax expenses of 44.29M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.84 1.34
EV to Cash from Ops. EV/CFO 19.37 2.97
EV to Debt EV to Debt 1.79 6.15
EV to EBIT EV/EBIT 5.47 5.23
EV to EBITDA EV/EBITDA 271.70 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF 20.65 -9.39
EV to Market Cap EV to Market Cap 1.38 4.27
EV to Revenue EV/Rev 1.82 3.62
Price to Book Value [P/B] P/B 2.64 2.10
Price to Earnings [P/E] P/E 5.54 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.84 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 20.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.12 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -30.53 0.42
Interest Coverage Int. cover (Qtr) 5.36 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 30.60 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.14 23.84
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 100.62 4.69
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.09 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) 56.50 12.80
EBT Growth (1y) % EBT 1y % (Qtr) 54.35 21.27
EPS Growth (1y) % EPS 1y % (Qtr) 93.55 22.42
FCF Growth (1y) % FCF 1y % (Qtr) 69.67 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 20.95 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.58 1.45
Cash Payout Ratio Cash Payout (Qtr) -1.17 -0.01
Cash Ratio Cash Ratio (Qtr) 0.14 1.45
Current Ratio Curr Ratio (Qtr) 1.03 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 1.87 -0.06
Interest Cover Ratio Int Coverage (Qtr) 5.36 -2.22
Times Interest Earned Times Interest Earned (Qtr) 5.36 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.40 -121.98
EBIT Margin % EBIT Margin % (Qtr) 5.75 -136.76
EBT Margin % EBT Margin % (Qtr) 4.68 -144.54
Gross Margin % Gross Margin % (Qtr) 100.00 32.87
Net Profit Margin % Net Margin % (Qtr) 3.30 -139.89