Q1 Earnings Review: eXp World Vs Other Real Estate Stocks

As the Q1 earnings season draws to a close, it's an opportune time to evaluate this quarter's top and bottom performers in the real estate services industry. This analysis includes eXp World (NASDAQ:EXPI) and its peers.

Technology has proven to be a double-edged sword for real estate services. While internet listings have been effective in disseminating information widely, potentially increasing transaction chances, digitalization could also disintermediate significant players like agents who capitalize on information asymmetries.

The 14 real estate service stocks we monitor had mixed results in Q1; revenues surpassed analyst consensus estimates by an average of 4.2%. However, next quarter's revenue guidance was 4% below consensus. Although valuation multiples for many growth stocks have not yet rebounded to their early 2021 highs, optimism prevailed at the end of 2023 due to cooling inflation rates. The beginning of 2024 painted a different picture as market volatility ensued due to mixed signals—although some real estate service stocks fared better than others overall, they collectively declined with share prices falling by an average of 3.1% since previous earnings reports

eXp World (NASDAQ:EXPI), established in 2009 is recognized for its virtual cloud-based approach towards real estate brokerage. It reported revenues topping $943 million—a year-on-year increase of around ten percent—which exceeded analysts' expectations by about five percent but fell short on agent and broker estimates resulting in weaker performance this quarter from the company.

JLL (NYSE:JLL), born out of the Jones Lang Wootton and LaSalle Partners merger back in 1999, specializes in providing advisory and investment management services related to real estate. The company reported eight percent YoY growth with revenue figures touching $5 billion, which beat analyst expectations impressively, leading up to an eleven percent rise post-results announcement.

Anywhere Real Estate (NYSE:HOUS), formerly known as Realogy Holdings, reported a slight YoY decrease in revenues at $1.13 billion, which did not meet analysts' expectations, leading to the weakest performance against analyst estimates among its peers.

Opendoor (NASDAQ:OPEN), founded by Eric Wu, offers a streamlined process for buying and selling homes driven by technology. Despite surpassing analysts’ earnings estimates, it had the slowest revenue growth among its peers, with figures falling 62% YoY to around $1.18 billion.

Zillow (NASDAQ:ZG), an online real estate marketplace leader in the U.S., co-founded by Expedia's Lloyd Frink and Rich Barton, reported a 12% YoY increase in revenues at approximately $529 million, slightly beating analyst forecasts but missing on monthly active user predictions.

In conclusion, this quarter presented mixed results for real estate services stocks—with some exceeding expectations while others fell short—highlighting how factors such as market volatility, digitization trends, and inflation rates can impact industry performances significantly. As we move into the next quarter, it will be interesting to monitor these dynamics further, along with their potential implications for future stock movements.