The Real Brokerage: a brokerage business built around a tech platform

The Real Brokerage, Inc. (REAX) represents a growth opportunity in the U.S. residential real estate market, based on a low-capital-intensity model, its proprietary technology platform (reZEN), and consistent market share gains in a highly fragmented industry. The expected closing in 2H 2026 of the acquisition of RE/MAX Holdings will transform the company’s profile into a globally scaled platform uniting more than 184.6k real estate professionals. AI technologies powered by Leo CoPilot and the HeyLeo.com portal provide additional opportunities to boost agent productivity and generate deals.

Investment highlights:

• The RE/MAX acquisition changes the nature of revenue. In addition to organic growth in agent count, a different type of income source is added. The share of commission brokerage in gross profit declines from 95% to 55%, giving way to high-margin recurring payments. Over the last twelve months, the combined business would have generated $2.5 bln in revenue and $163.7 mln in adjusted EBITDA with a 6.5% margin. Management estimates cost savings at $30 mln annually.

• Platform integration remains a barrier to new entrants. The market fears that the availability of AI tools will allow new players to quickly replicate the platform. However, practice does not confirm this. The number of agents increased by 26% YoY to 35.4k, while churn declined to 6.1% versus 8.0% in the prior quarter. Productivity per agent rose to 1.76 deals per quarter versus 1.25 in the first. None of the metrics indicate a weakening of the company’s position.

• The stock has rebounded, but the gap between valuation and earnings remains. Since the beginning of the year, the shares were down as much as 58%, falling to $1.55, while adjusted EBITDA for the last twelve months rose to $77 mln versus $58 mln for the twelve months through September 2025. By August 14, the price recovered to $2.40, up 55% from the low; however, the market still values the company at 5.0x annual adjusted EBITDA, whereas at the start of the year the same metric stood at 11.9x.

Target price: $4,00