Real Brokerage Inc (NASDAQ: REAX)

Sector: Real Estate Industry: Real Estate Services CIK: 0001862461
Market Cap 693.33 Mn
P/B 12.93
P/E -65.75
P/S 0.38
ROIC (Qtr) -25.22
Div Yield % 0.00
Rev 1y % (Qtr) 52.64
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
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About

Investment thesis

Bull case

  • Operating cash flow of 69.86M provides exceptional 82.09x coverage of interest expenses 851000, showing strong debt service capability.
  • Robust free cash flow of 68.85M exceeds capital expenditure of 1.02M by 67.76x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 131.70M provides 3.98x coverage of working capital 33.09M, indicating strong operational backing.
  • Free cash flow of 68.85M provides exceptional 80.90x coverage of interest expense 851000, showing strong debt service ability.
  • Operating cash flow of 69.86M provides solid 0.76x coverage of current liabilities 91.62M, showing strong operational health.

Bear case

  • Operating cash flow of 69.86M barely covers its investment activities of (15.11M), with a coverage ratio of -4.62, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (15.11M) provide weak support for R&D spending of 16.68M, which is -0.91x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 69.86M shows concerning coverage of stock compensation expenses of 65.53M, with a 1.07 ratio indicating potential earnings quality issues.
  • Operating earnings of (9.61M) show weak coverage of depreciation charges of 1.72M, with a -5.60 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of (108.65M) provide limited buffer against comprehensive income items of 392000, which is -277.16x, indicating elevated exposure to market risks.

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. 42.12 Bn 36.40 1.04 9.99 Bn
2 BEKE KE Holdings Inc. 19.37 Bn 39.77 1.33 2.96 Bn
3 CSGP Costar Group, Inc. 18.57 Bn 914.80 6.08 1.18 Bn
4 JLL Jones Lang Lasalle Inc 13.60 Bn 21.53 0.54 3.48 Bn
5 FSV FirstService Corp 7.02 Bn 48.37 1.28 1.38 Bn
6 CIGI Colliers International Group Inc. 5.59 Bn 54.27 1.01 2.29 Bn
7 COMP Compass, Inc. 5.18 Bn -91.82 0.78 0.48 Bn
8 OPEN Opendoor Technologies Inc. 3.12 Bn -9.84 0.66 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.11 1.18
EV to Cash from Ops. EV/CFO 8.55 -6.57
EV to Debt EV to Debt 0.00 5.19
EV to EBIT EV/EBIT -62.20 4.86
EV to EBITDA EV/EBITDA -68.91 13.56
EV to Free Cash Flow [EV/FCF] EV/FCF 8.68 -11.14
EV to Market Cap EV to Market Cap 0.86 7.70
EV to Revenue EV/Rev 0.33 3.49
Price to Book Value [P/B] P/B 12.93 1.76
Price to Earnings [P/E] P/E -65.75 40.59
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.36
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -7.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.46
Interest Coverage Int. cover (Qtr) -11.29 -2.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.34 -12,527.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 44.37 24.62
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.26
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 68.28 10.86
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 69.88 33.08
EBIT Growth (1y) % EBIT 1y % (Qtr) 68.55 19.37
EBT Growth (1y) % EBT 1y % (Qtr) 67.18 28.48
EPS Growth (1y) % EPS 1y % (Qtr) 77.78 29.29
FCF Growth (1y) % FCF 1y % (Qtr) 82.91 67.74
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 56.19 33.25
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 12.49 1.44
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 0.79 1.45
Current Ratio Curr Ratio (Qtr) 1.36 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -0.07
Interest Cover Ratio Int Coverage (Qtr) -11.29 -2.20
Times Interest Earned Times Interest Earned (Qtr) -11.29 -2.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.40 -120.34
EBIT Margin % EBIT Margin % (Qtr) -0.53 -135.17
EBT Margin % EBT Margin % (Qtr) -0.58 -142.98
Gross Margin % Gross Margin % (Qtr) 8.60 32.99
Net Profit Margin % Net Margin % (Qtr) -0.60 -138.31