Short Report on Newmark Stock

Now trading at a price of $9.06, Newmark has moved 6.0% so far today. In contrast, the S&P 500 index moved 0.6%. Read below for a basic value analysis of Newmark.

Newmark shares moved -45.0% over the last 52 weeks, with a high of $18.43 and a low of $7.41. During this time, the stock lagged the S&P 500 index by -37.0%. As of January 2022, the company's 50-day average price is $8.36. Newmark Group, Inc. provides commercial real estate services in the United States and internationally. The small-cap Real Estate company has 5,200 full time employees and is based in New York, NY. Newmark has returned a 1.2% dividend yield over the last 12 months.

Higher Operating Margins Than the 1.17% Industry Average:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $2,218 $1,905 $2,906
Revenue Growth n/a -14.12% 52.57%
Operating Margins 7.4% 8.9% 0.8%
Operating Margins Growth n/a 20.27% -91.01%
Net Margins 5.29% 4.2% 25.83%
Net Margins Growth n/a -20.6% 515.0%
Earnings Per Share $0.58 $0.39 $3.8
EPS Growth n/a -32.76% 874.36%
Free Cash Flow (MM) $951 -$798 -$68
FCF Growth n/a -183.88% 91.42%
Capital Expenditures (MM) -$36 -$20 -$20
Net Debt / EBITDA 2.27 4.96 1.18

Newmark Is Currently Fairly Valued:

Compared to the Real Estate sector's average of 27.16, Newmark has a trailing twelve month P/E ratio of 7.9 and, according to its EPS guidance of 1.3, an expected P/E ratio of 7.0. Newmark's PEG ratio is 0.03 based on its 258.33% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Newmark's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.6, which still suggests that company's shares are possibly undervalued.

Furthermore, Newmark is likely undervalued in terms of its equity because its P/B ratio is 1.3 compared to its sector average of 2.39. The company's shares are currently trading -41.6% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 1.59 * 6.739) = $15.53

Newmark Is the Subject of Mixed Market Indicators:

4 analysts are following Newmark and have set target prices ranging from $8 to $10 per share. On average, they have given the company a rating of hold. At the current price of $9.06, NMRK is trading 0.72% away from its average analyst target price of $9 per share, implying an analyst consensus of little upside potential for the stock.

The company has an average amount of shares sold short since 2.4% of the company's shares are tied to short positions. Institutions own 66.3% of Newmark's shares, while the insider ownership rate stands at 8.42%. The biggest shareholder is the Vanguard Group, Inc. with a 15% stake in the company worth approximately $198,801,918.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.