Adam Contos is now in his fourth year as the sole CEO of RE/MAX (NYSE: RMAX). RE/MAX remains one of the largest and most significant real estate brands in the world. But like some of the other major brands such as Coldwell Banker, Century 21, Berkshire Hathaway HomeServices and Keller Williams Realty, RE/MAX is just not what the industry is buzzing about today. Companies with fresh brands and newer models such as Compass and eXp Realty have experienced outsized growth and attention, and a slew of top agents and teams leaving these companies to join the newer ones.
Regardless, the company continues to hold its own, as revealed in its third quarter 2021 results:
- 140,936 in global agent count, up 4.6 percent from the third quarter 2020.
- $91 million in revenue, a 28 percent increase from the third quarter 2020.
- 176 open Motto Mortgage franchises, up 32 percent from the third quarter 2020.
While RE/MAX’s primary metric, agent count, is up in the third quarter to 140,936 from 120,821 in first quarter of 2018, most of the growth has been outside of the important markets of U.S. and Canada. In fact, in the U.S., agent count dropped from 63,612 to 62,007 over that period. This seems to have impacted the company’s stock performance. Since March of 2018, shortly after Contos took over as sole CEO, RE/MAX has lost almost half of its market cap, from over $1 billion to under $520 million as of this writing in late 2021. This amount is only a fraction of some of its major competitors, and with only $120 million in cash at the end of the third quarter 2021, it has a smaller sum to operate with compared to the war chests at some of its other publicly owned competitors.
A future opportunity for RE/MAX will most likely come from its technology-focused strategy it has been focused on for the past few years. It acquired Booj, First, mortgage tech firm Wemlo and location data firm Gadberry Group. Although no major tech announcement has been made yet about what’s it has worked on, RE/MAX has reportedly been doing some interesting technical work behind the scenes and notable results are expected in 2022. Contos made a smart move with the acquisition of the world’s largest master franchisor, RE/MAX Integra. The Canadian and U.S. operations of this master franchise region manages 19,000 agents in nine U.S. states and five Canadian provinces. The impact of this transaction will show up in the next quarterly result and will have a very positive impact on RE/MAX income and profit.