Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of KE Holdings Are Falling Today

By Bram Berkowitz - May 10, 2021 at 3:00PM

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

There was no obvious reason behind the fall for China's leading real estate brokerage.

What happened

Shares of KE Holdings (BEKE -3.75%), the largest real estate platform in China, traded as much as 15% lower at one point today for no obvious reason.

So what

KE Holdings operates China's leading real estate brokerage brand and has been around for about two decades. Last August, the company went public, pricing its initial public offering at about $20 per share. Today, the company currently trades for $46.58.

Investors have been excited about KE's online platform called Beike that pairs homebuyers with renters, and the company has been compared to the U.S. real estate brokerage Redfin (RDFN -11.61%).

Hand with marker drawing downward-trending line.

Image source: Getty Images.

There is no obvious reason I can tell for the shares' decline today. But KE Holdings' stock has been trending downward from close to $70 per share six months ago and around $53 per share roughly one month ago.

Now what

As of 2:45 p.m. on Monday, KE Holdings stock had bounced back and only traded more than 8% down on the day. Because the stock had such a big run-up in its first few months, investors may simply be taking gains, or potential investors may believe the company is overvalued.

Still, analysts on average recently gave KE Holdings a buy rating, with most of their price targets at $60 per share or above. The company will report earnings from the first quarter of the year on May 19, which could be a major catalyst for the stock.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Redfin. The Motley Fool recommends the following options: short May 2021 $65 puts on Redfin. The Motley Fool has a disclosure policy.

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

KE Holdings Inc. Stock Quote
KE Holdings Inc.
BEKE
$15.38 (-3.75%) $0.60
Redfin Corporation Stock Quote
Redfin Corporation
RDFN
$10.05 (-11.61%) $-1.32

*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
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

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.