Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Realogy Holdings Are Rising Today

By Bram Berkowitz - Updated Apr 29, 2021 at 10:23AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company delivered a strong quarter of earnings results, beating expectations handily.

What happened

Shares of the real estate brokerage and title and escrow company Realogy Holdings (RLGY 6.10%) rose more than 15% as of 10:45 a.m. EDT Thursday, after the company announced earnings results for the first quarter of the year.

So what

Realogy, which franchises brokerage brands such as Century 21, Coldwell Banker, and Sotheby's International Realty, reported a $33 million profit, or basic earnings per share (EPS) of $0.28 on total revenue of $1.55 billion.

Profits blew past analysts' earnings estimates, and revenue also beat slightly as well.

House with a large front lawn on a sunny day

Image source: Getty Images.

Combined closed transaction volume in the first quarter increased 44% year over year, which was well above the 28% year-over-year market volume growth reported by the National Association of Realtors.

"We are off to a phenomenal start to 2021, delivering the strongest first quarter top and bottom line results in Realogy's history," CFO Charlotte Simonelli said in a statement.

Now what

The earnings beat resulted in a pretty big surprise, which is why the stock is doing well.

Realogy also showed good transaction volume growth even as mortgage rates have come up. Usually when mortgage rates rise, transactions slow because the cost of borrowing becomes more expensive.

So the earnings surprise is a welcome sign, perhaps meaning there could be pent-up demand and that the real estate boom is not over. But I also still worry that rising mortgage rates could still slow the real estate market later this year, which would not be good for the company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Realogy Holdings Corp. Stock Quote
Realogy Holdings Corp.
RLGY
$10.43 (6.10%) $0.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.