RE/MAX Holdings (RMAX) Q3 Earnings: What's In The Cards?

Real estate operations firm RE/MAX Holdings, Inc. (NYSE:RMAX) is expected to report third-quarter 2016 results on Nov 3, after the market closes.

The company reported a positive earnings surprise of 4.6% in the preceding quarter, and an average beat of 9.2% for the trailing four quarters. The Zacks Consensus Estimate for the third-quarter is currently pegged at 45 cents.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Denver, CO-based RE/MAX Holdings is a leading franchisor of real estate brokerage services with unmatched global footprint. The company holds a steady fee-based revenue model with strong cash flow and margins.

RE/MAX Holdings boasts a highly productive network of over 100,000 agents. Number of agents is expected to rise by 5.5% to 6.0% over the third quarter, driven by strong agent growth outside the U.S. and Canada. This should have positive impact on the results.

Earnings Whispers

Our proven model does not conclusively show that RE/MAX Holdings will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks ESP: Both the Most Accurate Estimate and the Zacks Consensus Estimate currently stand at 45 cents, which translate into an Earnings ESP of 0.00%.

Zacks Rank: RE/MAX Holdings’ Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP as well to be confident about an earnings beat.

Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks in the real estate investment trust sector you may want to consider, as our model shows that they have the right combination of elements to post a positive surprise this quarter:

National Health Investors Inc. (NYSE:NHI) has an Earnings ESP of + 1.61% and a Zacks Rank #3. The company will report results on Nov 7.

Parkway, Inc. (NYSE:PKY) will report results on Nov 7. It has an Earnings ESP of +28.89% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altisource Residential Corporation (NYSE:RESI) has an Earnings ESP of + 66.22% and a Zacks Rank #3. The company will report results on Nov 7.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>