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The Real Brokerage Inc

REAX

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The Real Brokerage Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-10

Snapshot

  • Asset turnover TTM of 14.6x vs industry median 0.12x - 118x more capital efficient, ultra-lean brokerage model[Asset Turnover]
  • FCF TTM of 66.1M on -10.5M net income - cash generation decoupled from GAAP losses, stock comp masking profitability[Free Cash Flow]
  • 5Y revenue CAGR 170% vs industry 6.6% - hypergrowth phase with 1.8B TTM revenue, approaching scale inflection[Total Revenue 5Y Growth]

Watch Triggers

  • Gross Margin: Falls below 7% for 2 consecutive quartersWould signal agent economics deteriorating and margin expansion thesis failing
  • Free Cash Flow: Turns negative while losses persistWould eliminate key bull case of cash generation despite GAAP losses
  • Total Revenue 3Y Growth: Decelerates below 30% annualizedGrowth premium evaporates if hypergrowth phase ends prematurely

Bull Case

Zero debt with 36.4M cash and 66M FCF provides M&A firepower in fragmented brokerage market without dilution risk

Debt to EquityFree Cash Flow TTMCash and Equivalents

P/S of 0.49x vs industry median 4.5x - 90% discount despite 170% 5Y CAGR suggests market mispricing growth durability

P/S RatioTotal Revenue 5Y Growth

Bear Case

Gross margin 8.6% structurally capped by agent commission splits - limited pricing power in commoditized brokerage

Gross Margin TTMCost of Revenue TTM

P/B of 22x on 53.6M equity - thin capital base means any impairment or loss acceleration destroys book value

P/B RatioCommon Stockholders Equity

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
55%

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Forward Thesis

Gross margin expansion from 8.6% toward 12%+ as agent mix shifts to higher-retention producers

1-3ymed
  • Gross profit 1Y growth 40% outpacing revenue growth
  • Operating leverage as fixed costs absorbed
  • Agent productivity gains from tech platform
Gross margin TTM 8.6% vs 6.1% industry medianGross profit 1Y growth 39.6%R&D spend 16.7M indicates tech investment

Path to GAAP profitability within 12-18 months as operating losses narrow

3-12mmed
  • Operating loss only -10.4M on 1.8B revenue
  • FCF already positive at 66M
  • Scale economics improving
Operating margin -0.6% vs -9.9% industry meanCash flow TTM 69.9M positiveZero debt provides runway

Valuation Context

Caveats

Data Partners
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Fundamental company data provided by Morningstar, updated daily.

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