Is The Real Brokerage the Next Palantir? A High-Growth AI-Driven Disruptor in Real Estate
The real estate industry has long resisted major technological changes. That’s now shifting with The Real Brokerage Inc. (REAX), a company leveraging artificial intelligence (AI), automation, and embedded finance to change how homes are bought, sold, and managed. As investors look for high-growth opportunities in AI-driven software, a key question emerges: Can REAX follow Palantir’s explosive growth path and become the next big winner?
AI-Driven Disruption: REAX vs. Palantir
Palantir Technologies (PLTR) gained fame by transforming data analytics for governments and businesses, using its Gotham and Foundry platforms to tackle complex challenges in national security, healthcare, and energy. Its growth was built on critical, high-margin contracts and a strong moat around data integration. Palantir’s valuation multiples—378x price-to-earnings and 69x price-to-sales—reflect market confidence in its AI monetization capabilities.
The Real Brokerage takes a different approach. Instead of focusing on enterprise clients, REAX empowers real estate agents, who are central to a $6.8 trillion U.S. market. Its AI assistant, Leo CoPilot, automates routine tasks like client follow-ups, document preparation, and compliance checks. This increases agent productivity by 5% year-over-year. Given that 80% of communication in real estate happens via text, Leo’s ability to handle over 10,000 daily interactions per agent stands out.
Financials: Explosive Growth and Scalable Margins
REAX’s Q1 2025 numbers highlight its potential. Revenue jumped 76% year-over-year to $354 million, driven by a 77% increase in closed transactions (33,617) and an 80% rise in gross transaction value ($13.5 billion). Its agent count also grew 61% to 26,870, while adjusted operating costs per transaction dropped 12%. The company scaled from about 1,000 agents to nearly 27,000 with a lean staff of just 10 people. In contrast, Palantir’s 27% revenue growth in Q2 2024 comes from longer sales cycles and high-touch contracts. REAX’s scalable model benefits from an 85/15 commission split and a revenue-sharing program that motivates agents to recruit others. With only 11% of agents currently recruiting, the growth potential is significant.
Embedded Finance: A New Revenue Stream
REAX’s Real Wallet platform adds another layer of revenue. By providing agents with checking accounts, tax planning, and credit lines, this fintech offering grew its annualized revenue run rate by 40% to $700,000. With 3,200 agents using Real Wallet and average deposits around $8 million, it’s a steady contributor to the bottom line. This model contrasts with Palantir’s B2B focus, where monetizing end-users directly is less straightforward.
Valuation: Is REAX Undervalued?
Despite $354 million in revenue and $8.3 million in adjusted EBITDA in Q1 2025, REAX trades at a market cap of roughly $917 million. Analysts suggest a fair value near $1.5 billion, implying a 65% upside. Palantir’s $310 billion market cap in 2025 puts it at about 10 times revenue, even with slower growth in mature markets. REAX’s appeal lies in scalable AI infrastructure and efficient expansion. Its strong balance sheet—with $35 million cash, $16 million operating cash flow, and zero debt—supports buybacks ($6 million in Q1) and R&D spending. With 76% revenue growth year-over-year and a 354% five-year stock return, REAX is outpacing the S&P 500.
Risks and Challenges
REAX faces risks like commission caps in 12 states and a potential slowdown in the housing market that could squeeze margins. Palantir deals with regulatory challenges in its government contracts. However, REAX’s embedded finance services and mortgage/title operations, including 97 licensed loan officers, provide diversified revenue beyond commissions.
Investment Thesis
For those searching for the next Palantir, REAX offers a combination of AI-driven disruption and scalable margins. Its agent-focused AI tools paired with fintech solutions position it well to capture a larger slice of the $1.4 trillion real estate services market. Trading at a price-to-sales ratio of 2.6x compared to Palantir’s 69x, REAX appears undervalued relative to its growth prospects.
Recommendation: Buy REAX for its high-growth AI platform and scalable business model. Hold for 12 to 18 months with a price target of $8 per share, representing a 65% upside from $4.71 as of July 19, 2025. In AI-driven software, where Palantir once led, The Real Brokerage is emerging as a strong contender. By combining agent-centric AI, embedded finance, and a remote-first approach, REAX is building a platform set for significant growth.
Your membership also unlocks:
