Residential real estate services company Anywhere Real Estate (NYSE:HOUS) fell short of analysts' expectations in Q1 CY2024, with revenue down 0.4% year on year to $1.13 billion. It made a GAAP loss of $0.91 per share, improving from its loss of $1.26 per share in the same quarter last year.
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Anywhere Real Estate (HOUS) Q1 CY2024 Highlights:
- Revenue: $1.13 billion vs analyst estimates of $1.15 billion (1.8% miss)
- EPS: -$0.91 vs analyst expectations of -$0.69 (31.4% miss)
- Gross Margin (GAAP): 35.5%, down from 36.1% in the same quarter last year
- Free Cash Flow was -$145 million compared to -$13 million in the previous quarter
- Market Capitalization: $601 million
Formerly known as Realogy Holdings, Anywhere Real Estate (NYSE:HOUS) is a residential real estate company with a network of brokerages, franchises, and settlement services.
Real Estate ServicesTechnology has been a double-edged sword in real estate services. On the one hand, internet listings are effective at disseminating information far and wide, casting a wide net for buyers and sellers to increase the chances of transactions. On the other hand, digitization in the real estate market could potentially disintermediate key players like agents who use information asymmetries to their advantage.
Sales GrowthA company’s long-term performance can give signals about its business quality. Any business can put up a good quarter or two, but many enduring ones muster years of growth. Anywhere Real Estate's revenue was flat over the last five years. Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. Anywhere Real Estate's recent history shows a reversal from its five-year trend as its revenue has shown annualized declines of 16.5% over the last two years.
This quarter, Anywhere Real Estate missed Wall Street's estimates and reported a rather uninspiring 0.4% year-on-year revenue decline, generating $1.13 billion of revenue.
Cash Is KingIf you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
Over the last two years, Anywhere Real Estate broke even from a free cash flow perspective, subpar for a consumer discretionary business.
Anywhere Real Estate burned through $145 million of cash in Q1, equivalent to a negative 12.9% margin, reducing its cash burn by 20.8% year on year.
Key Takeaways from Anywhere Real Estate's Q1 Results Anywhere Real Estate missed analysts' revenue, EBITDA, and EPS estimates this quarter as its housing unit sales were down 4% year on year. Its average prices, however, were up 7%, allowing it to post closed transaction growth for the first time in two years. The luxury segment outperformed as the company's Sotheby's International Realty brand saw closed transaction values up 7% year on year, split evenly between unit and price growth.
Looking ahead, the company expects moderately positive free cash flow for the full year (excluding a one-time ~$112.5 million expense), beating Wall Street's expectations. Overall, this was a mediocre quarter for Anywhere Real Estate, but the market is likely happy it generated closed transaction growth. The stock is up 4.8% after reporting and currently trades at $5.68 per share.