Jul. 9 at 3:36 PM
$REAX here can be a rate-cut growth play—The Real Brokerage is the only cloud-native U.S. residential brokerage compounding ≥70 % inside a frozen housing market. It’s on track for its first-ever GAAP breakeven next quarter, while EBITDA, operating cash-flow, and free cash-flow are already positive.
$SPY $QQQ
The Real Brokerage is a cloud-native real-estate platform that recruits agents onto a mobile workspace instead of renting storefronts. Agents pay the company 15 % of every commission until they have remitted roughly
$12 000 for the year; after that they keep 100 % and Real collects a flat about-
$225 fee per closing. That structure lets Real scale without the fixed overhead that weighs on traditional brokers, while an equity-and-revenue-share program turns agents into recruiters and owners.
Explosive share gains in a down market. In 1Q 25 the U.S. existing-home market was basically flat, yet Real’s closings jumped 77 % to 33 617 and its national share doubled to roughly 3 %. Agent count rose 61 % to 26 870
Positive cash metrics ahead of GAAP breakeven. The same quarter produced
$8.3 million in adjusted EBITDA,
$16 million of operating cash flow and positive free cash flow, even though gross margin was only 9.6 %. Street models show the first clean GAAP breakeven arriving in Q2.
Ancillary runway. Title, mortgage and Wallet combined were still well under 1 % of revenue but are growing quickly; a wider rollout could add high-margin dollars and lift EBITDA another point or two over the next 18 months.
Transaction growth is outrunning revenue growth because top producers cap out early—12 % of agents already generate half of brokerage revenue. Once Real finishes its land-grab it can raise the cap, bump the post-cap fee, or introduce paid AI tools. Each 100-basis-point lift in take-rate is worth roughly
$10-12 million in gross profit—enough to swing the whole P&L in a flat sales year.
Catalysts in plain sight
Q2 print (early August): management is guiding to the first GAAP-break-even quarter; a clean beat would confirm operating leverage.
Flyhomes consumer portal (2H 25): plugs a Zillow-level search front-end and a “buy-before-you-sell” financing product into Real’s funnel, boosting higher-margin mortgage attach.
Rate cuts: every 50-bp move down in the 30-year historically lifts existing-home sales 6-10 % within a year. If the Fed starts easing this fall, Real’s volume should accelerate almost linearly.
ROTH’s target is
$7.50 and B. Riley just initiated at
$7, against a sub-
$4.50 print today and a multiple barely 0.7 × forward sales.
R/R seems attractive:
A growth miss would be painful—the market pays up only as long as agent adds stay north of 40 % and transactions beat the macro tape. But continued execution for two or three more years can plausibly move the stock three- to five-fold: higher volumes on a lower-rate backdrop, modest pricing tweaks, and even single-digit EBITDA margins on a business that is already free-cash-flow positive.
Real is less exposed to mortgage-spread swings than Rocket, less dependent on ad cycles than Zillow, and avoids the balance-sheet baggage that hamstrung Redfin’s iBuying pivot. As long as management keeps proving the model every quarter, the market’s reluctance to value a tech-driven brokerage above 1 × sales looks like the real anomaly.
