Anywhere Real Estate (HOUS) Reports Next Week: Wall Street Expects Earnings to Rise

Anywhere Real Estate (HOUS) is expected to deliver year-over-year earnings growth on higher revenue when it reports results for the quarter ended September 2024. This widely reported consensus estimate gives a good idea of the company’s earnings picture, but comparing actual results to these estimates is a powerful factor that could impact the stock price in the near term.

The stock could move higher if these key numbers beat expectations for its upcoming earnings report, which is expected to be released on November 7th. On the other hand, if they don’t materialize, the stock could fall.

While management’s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price movement and future earnings expectations, it’s worth being aware of the chances of a positive EPS surprise.

Zacks Consensus Estimate

The real estate brokerage is expected to post quarterly earnings of $0.23 per share in its upcoming report, which would represent a change of +53.3% year-over-year.

Revenue is expected to be $1.62 billion, up 2.3% from the year-ago quarter.

Assessing trends

Consensus EPS estimates for the quarter have been revised 7.69% higher over the past 30 days to current levels. Essentially, this is a reflection of how leading analysts have collectively revised up their initial estimates for the period.

Investors should note that the direction of each covering analyst’s estimate revisions may not always be reflected in the aggregate change.

Whispers about income

Revising estimates ahead of a company’s earnings release provides insight into business conditions in the period as the results are released. This insight is the basis of our proprietary surprise prediction model, the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the best estimate to the Zacks Consensus Estimate for the quarter; The most accurate estimate is an upgrade of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates just before an earnings release have the most up-to-date information, which could potentially be more accurate than what they and other consensus members previously predicted.

Thus, a positive or negative Earnings ESP theoretically indicates the likely deviation of actual earnings from consensus estimates. However, the predictive power of the model is significant only for positive ESP readings.

A positive earnings ESP is a strong predictor of earnings growth, especially when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of the Earnings ESP.

Please note that negative Earnings ESP values do not indicate a lack of profit. Our research shows that it is difficult to predict earnings performance with any degree of confidence for stocks with a negative Earnings ESP and/or a Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How have the real estate numbers changed anywhere?

For Anywhere Real Estate, the Best Estimate matches the Zacks Consensus Estimate, suggesting there are no recent analyst opinions that differ from what was considered to arrive at the consensus estimate. As a result, the profit ESP was 0%.

On the bright side, the stock currently has a Zacks Rank #3.

As such, this combination makes it difficult to definitively predict that Anywhere Real Estate will beat the consensus EPS estimate.

Is there any clue in the history of earnings surprises?

Analysts often consider the extent to which a company has been able to meet consensus estimates in the past when calculating their estimates of its future earnings. So, it’s worth taking a look at the history of surprises to gauge its impact on the upcoming issue.

For its last reported quarter, Anywhere Real Estate was expected to report earnings of $0.30 per share when it actually reported earnings of $0.33, delivering a surprise of +10%.

Over the last four quarters, the company has topped consensus EPS estimates just once.

Bottom line

An increase or decrease in earnings cannot be the only reason a stock moves up or down. Many stocks end up losing ground despite declining earnings due to other factors that disappoint investors. Likewise, unforeseen catalysts are helping a number of stocks rise despite declining earnings.

However, betting on stocks that are expected to beat earnings expectations does increase the odds of success. That’s why it’s worth checking a company’s ESP and Zacks Rank ahead of its quarterly releases. Be sure to use our Earnings ESP Filter to identify the best stocks to buy or sell before they go public.

Anywhere Real Estate doesn’t look like a compelling candidate with better returns. However, investors should pay attention to other factors to bet on or stay away from this stock ahead of its earnings release.

Expected results of an industry player

Another Zacks Real Estate – Operations stock, Jones Lang LaSalle (JLL), is soon expected to report earnings of $2.67 per share for the quarter ended September 2024. This estimate indicates a year-over-year change of +32.8%. Revenue for the quarter is expected to be $5.59 billion, up 9.4% from the year-ago quarter.

Consensus earnings per share estimates for Jones Lang LaSalle have been revised 0.5% higher over the past 30 days to current levels. However, the higher best estimate resulted in an earnings ESP of 13.86%.

This earnings ESP, coupled with a Zacks Rank #2 (Buy), suggests Jones Lang LaSalle stock is likely to beat the consensus EPS estimate. Over the last four quarters, the company has topped consensus EPS estimates three times.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report