Newmark (NASDAQ:NMRK) Surprises With Q3 Sales

Real estate services firm Newmark (NASDAQ:NMRK) announced better-than-expected revenue in Q3 CY2025, with sales up 25.9% year on year to $863.5 million. Its non-GAAP profit of $0.42 per share was 3.3% above analysts’ consensus estimates.

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Company Overview

Founded in 1929, Newmark (NASDAQ:NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Newmark grew its sales at a 10.3% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Newmark’s annualized revenue growth of 16.5% over the last two years is above its five-year trend, suggesting some bright spots.

This quarter, Newmark reported robust year-on-year revenue growth of 25.9%, and its $863.5 million of revenue topped Wall Street estimates by 11.8%.

Looking ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.

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Operating Margin

Newmark’s operating margin has been trending up over the last 12 months and averaged 5.5% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for a consumer discretionary business.

In Q3, Newmark generated an operating margin profit margin of 9.9%, up 3.9 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Newmark’s EPS grew at an unimpressive 5.3% compounded annual growth rate over the last five years, lower than its 10.3% annualized revenue growth. We can see the difference stemmed from higher interest expenses or taxes as the company actually improved its operating margin and repurchased its shares during this time.

In Q3, Newmark reported adjusted EPS of $0.42, up from $0.33 in the same quarter last year. This print beat analysts’ estimates by 3.3%. Over the next 12 months, Wall Street expects Newmark’s full-year EPS of $1.49 to grow 15.5%.

Key Takeaways from Newmark’s Q3 Results

We were impressed by how significantly Newmark blew past analysts’ revenue expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $18.61 immediately after reporting.

Is Newmark an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.