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Newmark Group Inc (NMRK)
NASDAQ:NMRK
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Newmark Group
(NASDAQ:NMRK)68Neutral
Newmark Group (NMRK) vs. S&P 500 (SPY)
Market Cap
$2.49B
Dividend Yield0.83%
Average Volume (3M)922.08K
Price to Earnings (P/E)40.1
Beta (1Y)2.01
Revenue Growth10.67%
EPS Growth47.10%
CountryUS
Employees7,000
SectorReal Estate
Sector Strength72
IndustryReal Estate
Share Statistics
EPS (TTM)0.35
Shares Outstanding159,177,290
10 Day Avg. Volume844,006
30 Day Avg. Volume922,076
Financial Highlights & Ratios
PEG Ratio0.85
Price to Book (P/B)N/A
Price to Sales (P/S)0.95
Price to Cash Flow (P/CF)-7.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.67Price Target Upside35.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Newmark Group Business Overview & Revenue Model
Company DescriptionNewmark Group, Inc. is a leading commercial real estate advisory firm that operates globally. The company provides a wide range of services including leasing, capital markets, global corporate services, industrial and logistics, property management, valuation and advisory, and retail services. With a significant presence in major markets across the world, Newmark aims to deliver comprehensive real estate solutions to clients through its innovative technology and deep industry expertise.
How the Company Makes MoneyNewmark Group, Inc. generates revenue primarily through commissions and fees derived from its comprehensive suite of real estate services. Key revenue streams include leasing commissions from facilitating property leases, capital markets services fees from arranging property sales and financing, and property management fees from managing client assets. Additionally, the company earns fees from advisory and valuation services. Newmark's earnings are significantly influenced by its strategic partnerships with property owners, corporate clients, and investors, as well as its ability to leverage technology to enhance service delivery and client engagement.
Newmark Group Financial Statement Overview
Summary
Newmark Group shows moderate financial health with a strong gross margin and stable revenues. However, profitability is limited due to low net and EBIT margins. The balance sheet reflects manageable leverage but low returns on equity. Cash flow challenges persist with negative free cash flow, affecting liquidity. Improvements in profitability and cash flow management are necessary.Income Statement
Newmark Group shows a slight revenue increase in TTM compared to the previous year, with a revenue growth rate of 11.5%. The gross profit margin remains strong at 100% due to zero cost of goods sold. However, net profit margin is relatively low at 1.25%, indicating tight profitability. EBIT and EBITDA margins are 5.9% and 10% respectively, showing some operational efficiency but leaving room for improvement.65
Positive
Balance Sheet
The company has a moderate debt-to-equity ratio of 0.44, suggesting manageable leverage. With an equity ratio of 32.6%, the balance sheet is reasonably stable. However, the return on equity is low at 2.24%, indicating limited profitability for shareholders. Overall, the balance sheet is stable but not highly profitable.70
Positive
Cash Flow
Cash flow from operations has improved but remains negative, indicating potential liquidity issues. Free cash flow is also negative, showing a decline from the previous year. The operating cash flow to net income ratio is negative, suggesting that cash generation from operations is insufficient to cover net income. This indicates cash flow management challenges.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.75B | 2.47B | 2.71B | 2.91B | 1.90B | Gross Profit |
| 2.75B | 2.47B | 2.71B | 2.91B | 1.90B | EBIT |
| 163.04M | 125.22M | 185.57M | 1.25B | 184.00M | EBITDA |
| 212.57M | 291.56M | 351.38M | 1.38B | 325.19M | Net Income Common Stockholders |
| 24.26M | 42.58M | 83.28M | 750.73M | 80.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 197.69M | 164.99M | 233.80M | 704.70M | 224.73M | Total Assets |
| 4.71B | 4.47B | 3.94B | 5.22B | 3.98B | Total Debt |
| 670.67M | 1.75B | 1.31B | 2.32B | 1.99B | Net Debt |
| 472.98M | 1.59B | 1.08B | 2.14B | 1.80B | Total Liabilities |
| 3.17B | 2.89B | 2.40B | 3.53B | 3.04B | Stockholders Equity |
| 1.21B | 1.25B | 1.54B | 1.69B | 941.19M |
| Cash Flow | Free Cash Flow | |||
| -9.94M | -321.32M | 1.13B | -79.63M | -797.52M | Operating Cash Flow |
| -9.94M | -265.96M | 1.20B | -59.91M | -777.69M | Investing Cash Flow |
| -33.43M | -49.74M | 308.63M | 453.09M | -3.60M | Financing Cash Flow |
| 89.53M | 261.46M | -1.46B | -396.28M | 817.82M |
Newmark Group Technical Analysis
Negative
13.81
Price Trends
13.51
Positive
14.25
Negative
13.22
Positive
Market Momentum
0.15
Positive
46.36
Neutral
43.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMRK, the sentiment is Negative. The current price of 13.81 is below the 20-day moving average (MA) of 14.10, above the 50-day MA of 13.51, and above the 200-day MA of 13.22, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 46.36 is Neutral, neither overbought nor oversold. The STOCH value of 43.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMRK.
Newmark Group Risk Analysis
Newmark Group disclosed 54 risk factors in its most recent earnings report. Newmark Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Newmark Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $12.44B | 23.26 | 8.08% | ― | 12.87% | 142.90% | |
74 Outperform | $41.88B | 44.38 | 11.51% | ― | 11.95% | -1.25% | |
68 Neutral | $2.49B | 40.08 | 2.01% | 0.83% | 10.67% | 47.10% | |
64 Neutral | $9.21B | 41.22 | 12.21% | 0.24% | 13.08% | 146.40% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
50 Neutral | $97.56M | ― | -0.67% | ― | 1.53% | 76.03% | |
38 Underperform | $13.82M | ― | 277.42% | ― | ― | ― |
* Real Estate Sector Average
Performance Comparison
NMRK
Newmark Group
13.81
3.27
31.02%
CBRE
CBRE Group
139.59
47.29
51.24%
JLL
Jones Lang Lasalle
262.41
75.25
40.21%
HFFG
HF Foods Group
1.85
-1.83
-49.73%
TSE:CIGI
Colliers International Group
181.99
23.95
15.16%
CWD
CaliberCos, Inc. Class A
0.65
-0.52
-44.44%
Newmark Group Earnings Call Summary
Earnings Call Date: Feb 14, 2025 | % Change Since: 0.15% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Positive
The earnings call presented a largely positive outlook with robust growth across key business lines and optimistic future performance expectations. However, challenges such as increased expenses and anticipated shifts in the debt market were noted.Highlights
Double-Digit Top Line Improvement
Newmark reported double-digit top line improvement across every major business line in the quarter, with management and servicing growing by 21%, capital markets by 20%, and leasing by 15%.
Significant Increases in Market Share
Newmark increased its U.S. debt market share by approximately 300 basis points to 9%, up by 6 times compared with 2015. Mortgage brokerage volumes increased by 209%, GSE origination by 85%, and investment sales by 71%.
Strong Revenue and Earnings Growth Expectations
Newmark anticipates strong revenue and earnings growth in 2025, with an adjusted EBITDA target of at least $630 million by 2026 and a goal of $1.75 of adjusted EPS in 2026.
Growth in Data Center Segment
Newmark executed nearly $17 billion in data center transactions last year and expects more growth, fueled by reshoring, the CHIPS Act, and AI investments.
Lowlights
High Compensation and Non-Compensation Expenses
Compensation increased by 13.4%, reflecting higher commission-based revenues and other costs. Non-compensation expenses rose by 8.2%, including higher pass-through costs and warehouse interest expenses.
Expected Challenges in the Debt Market
There is an anticipation of a slow and steady movement of the debt market to private capital, due to banks being overweight in commercial real estate.
Company Guidance
In the recent earnings call, Newmark Group provided optimistic guidance for the fiscal year 2025, projecting total revenues between $2.9 billion and $3.1 billion, which represents an approximate 9% increase at the midpoint. The company forecasts adjusted EPS to rise between 14% and 22%, landing in the range of $1.40 to $1.50. Additionally, Newmark anticipates adjusted EBITDA to be between $495 million and $545 million, marking an increase of 11% to 22%. The company expects its adjusted earnings tax rate to be between 14% and 16%. Newmark is also targeting at least a $630 million adjusted EBITDA by 2026, with an additional 110 basis point margin expansion, aiming for a 220 basis point improvement over the two-year period. Furthermore, Newmark introduced a 2026 goal for adjusted EPS of $1.75, signifying over 40% growth in earnings over the next two years.Newmark Group Corporate Events
Executive/Board Changes
Newmark Group Announces Leadership Changes in 2025
Neutral
Feb 19, 2025
On February 18, 2025, Cantor Fitzgerald fulfilled its deferred stock distribution obligations by exchanging limited partnership interests for 7,221,277 shares of Newmark’s Class A Common Stock. This transaction did not alter the number of shares outstanding. On the same date, Howard Lutnick stepped down as Newmark’s Executive Chairman after being confirmed as the U.S. Secretary of Commerce. Barry Gosin was appointed as Principal Executive Officer, and Kyle Lutnick and Stephen Merkel joined the Board of Directors, with Merkel also becoming the Chairman.
Legal Proceedings
Newmark Group Reaches Settlement in Stockholder Litigation
Neutral
Feb 12, 2025
On February 7, 2025, Newmark Group, Inc. and its Board of Directors entered into a settlement agreement with a class of stockholders to resolve litigation related to a 2021 cash bonus and partnership unit exchanges involving the company’s executive chairman. The settlement, pending court approval, will be funded by insurance and includes no admission of liability. This agreement aims to avoid prolonged litigation and its associated uncertainties, costs, and delays.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.