Is The Real Brokerage the Next Palantir? A High-Growth AI-Driven Disruptor in Real Estate

The real estate industry, long resistant to technological disruption, is now witnessing a seismic shift led by The Real Brokerage Inc. (REAX). With a business model built on artificial intelligence (AI), automation, and embedded finance, REAX is redefining how homes are bought, sold, and managed. As investors increasingly seek high-growth opportunities in the AI-software space, a compelling question emerges: Can REAX replicate Palantir's explosive trajectory as the next high-multiple winner?

AI-Driven Disruption: REAX vs. Palantir

Palantir Technologies (PLTR) rose to prominence by transforming data analytics for governments and enterprises, leveraging its Gotham and Foundry platforms to solve complex problems in national security, healthcare, and energy. Its growth was fueled by mission-critical applications, high-margin contracts, and a defensible moat around data integration. Today, Palantir's valuation metrics—378x P/E and 69x P/S—reflect the market's belief in its ability to monetize AI at scale.

The Real Brokerage, however, is carving a different path. Instead of targeting enterprise clients, REAX is focused on empowering real estate agents, the linchpin of a $6.8 trillion U.S. market. Its AI assistant, Leo CoPilot, automates tasks like client follow-ups, document preparation, and compliance checks, boosting agent productivity by 5% year-over-year. This is no small feat: in a sector where 80% of communication occurs via text, Leo's ability to handle 10,000+ daily interactions per agent is a game-changer.

Financials: Explosive Growth and Scalable Margins

REAX's Q1 2025 results underscore its disruptive potential. Revenue surged 76% YoY to $354 million, driven by a 77% rise in closed transactions (33,617) and an 80% jump in gross transaction value ($13.5 billion). Its agent base expanded 61% to 26,870, with a 12% reduction in adjusted operating cost per transaction. This scalability is critical: REAX's transaction team grew from ~1,000 to 27,000 agents while maintaining a lean staff of just 10 people.

Palantir's growth, while impressive (27% YoY revenue in Q2 2024), is rooted in high-touch, long-cycle contracts. REAX's model is more scalable, with a flywheel effect from its 85/15 commission split and revenue-sharing program, which incentivizes agents to recruit peers. Only 11% of agents currently participate in recruiting, suggesting untapped potential.

Embedded Finance: A New Revenue Stream

REAX's Real Wallet platform is another differentiator. By offering agents checking accounts, tax planning tools, and credit lines, the fintech arm generated a 40% YoY increase in annualized revenue run rate ($700k). With 3,200 agents using the service and average deposits of $8 million, Real Wallet is not just a value-add—it's a cash cow. This contrasts with Palantir's focus on B2B solutions, where monetizing end-users is less direct.

Valuation: Is REAX Undervalued?

REAX trades at a market cap of ~$917 million, despite generating $354 million in revenue and $8.3 million in Adjusted EBITDA in Q1 2025. Analysts project a $1.5 billion fair value based on its growth trajectory, implying a 65% upside. By comparison, Palantir's $310 billion market cap in 2025 reflects a 10x premium to revenue, despite slower growth in its core markets.

REAX's valuation appeal lies in its scalable AI infrastructure and low-cost expansion. Its balance sheet is robust ($35 million cash, $16 million operating cash flow, zero debt), allowing for strategic buybacks ($6 million in Q1) and R&D investments. With a 76% YoY revenue growth rate and a 354% 5-year stock return, REAX is already outperforming the S&P 500.

Risks and Challenges

While REAX's model is compelling, risks persist. Commission caps in 12 states and a slowing housing market could pressure margins. Palantir, meanwhile, faces regulatory scrutiny in its government contracts. However, REAX's embedded finance and mortgage/title services (e.g., 97 licensed loan officers) provide a buffer, diversifying revenue beyond commissions.

Investment Thesis

For investors seeking the next Palantir, REAX offers a compelling blend of AI-driven disruption, scalable margins, and a defensible moat. Its focus on agent empowerment, combined with fintech innovation, positions it to capture a growing share of the $1.4 trillion real estate services market. With a current P/S ratio of 2.6x (vs. Palantir's 69x), REAX is arguably undervalued relative to its growth potential.

Recommendation: Buy REAX for its high-growth AI platform and scalable business model. Hold for 12–18 months, with a price target of $8 per share (65% upside from $4.71 as of July 19, 2025).

In the AI-software space, where Palantir once reigned supreme, The Real Brokerage is now a formidable contender. By combining agent-centric AI, embedded finance, and a remote-first model, REAX is not just disrupting real estate—it's building a platform primed for exponential growth. For those who missed Palantir's 500% rally, REAX could be the next high-multiple winner in the AI revolution.