Marcus & Millichap Receives Market Perform Rating from Citizens JMP

Citizens JMP has begun coverage of Marcus & Millichap (MMI) with a Market Perform rating. They forecast significant earnings growth and margin improvements for MMI and other property service companies over the next two years. Despite initial concerns about higher interest rates, the firm suggests that MMI can benefit from more favorable sector trends. The average target price for MMI is $30.00, with a high estimate of $30.00 and a low estimate of $30.00.

Citizens JMP has initiated coverage on Marcus & Millichap (NYSE:MMI) with a Market Perform rating, citing macro factors that have negatively impacted the real estate investment firm’s revenue and profits. The investment firm noted that transaction activity has decreased significantly, forcing the company to use cash reserves to supplement operating cash flow. According to InvestingPro data, the company’s EBITDA stands at -$18.6 million for the last twelve months, though it maintains a strong current ratio of 3.77x [1].

Citizens JMP highlighted Marcus & Millichap’s competitive advantages in the smaller segment of the investment sales market (under $10 million), including limited competition, deep expertise, and an extensive database. Despite these strengths, the research firm expressed concerns about consistent profitability levels, making traditional valuation metrics less reliable for evaluating the company in the current environment.

Marcus & Millichap currently trades at a price-to-earnings multiple of 300x next-twelve-months earnings, significantly higher than the sector average of approximately 20x, suggesting the stock is fairly valued at current levels [1].

In recent news, Marcus & Millichap reported a 12% increase in revenue for Q1 2025, reaching $145 million, despite a net loss of $4.4 million. This marks an improvement from the previous year’s $10 million loss. The company attributed the revenue growth to a 13% rise in brokerage revenue and an 18% increase in transaction volume, totaling $6.7 billion across 1,175 transactions. Marcus & Millichap has made strategic investments in AI-powered systems and talent acquisition, aiming to enhance operational efficiency. The firm remains cautiously optimistic about market recovery and anticipates increased transaction activity. Furthermore, the company is tracking potential deals in multifamily, distressed office, and legacy retail sectors. Analysts from Wells Fargo recently engaged with the company, highlighting investor interest in various property types and geographical locations. Marcus & Millichap has also announced a management reorganization to accelerate growth initiatives [1].

Citizens JMP expects significant earnings growth and margin improvements for Marcus & Millichap and other property service companies over the next two years. Despite initial concerns about higher interest rates, the firm suggests that Marcus & Millichap can benefit from more favorable sector trends. The average target price for Marcus & Millichap is $30.00, with a high estimate of $30.00 and a low estimate of $30.00 [2].

References:
[1] https://www.investing.com/news/analyst-ratings/citizens-jmp-initiates-coverage-on-marcus--millichap-stock-with-market-perform-rating-93CH-4143040
[2] https://seekingalpha.com/news/4469352-citizens-initiates-coverage-of-newmark-cushman-wakefield-colliers-jones-lang-lasalle-marcus-millichap