NEWMARK GROUP, INC. (NMRK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $15.59, NEWMARK GROUP, INC. (NMRK) is priced for +21.2% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/NMRK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.8pp.

Reconcile: at the x-ray's 9.3% required return this reads ~13.2%/yr; the models below use their own rates.

How unusual the bet is: within-range

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.0%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Newmark is a commercial real estate services firm whose most cyclical business just turned up sharply: capital markets revenue rose 45.5% in the first quarter, the clearest sign that the deal-making side of commercial property is recovering.
• The biggest risk is that the recovery is rate-dependent: commercial property transactions rise and fall with interest rates and the economy, so a renewed downturn would hit the capital markets and leasing fees that drive the firm.
• Watch the raised full-year guidance, with revenue now expected at $3.775 to $3.875 billion and adjusted earnings before interest, tax, depreciation and amortization of $656 to $694 million, against the steadier servicing portfolio that reached $222.1 billion.

Bull Case

The single most decisive number for Newmark is the 45.5% jump in capital markets revenue, because it signals the turn in the cycle that the whole investment case depends on. Capital markets, the business of arranging the sale and financing of commercial properties, is the most cyclical and highest-margin part of the firm, and it goes quiet when interest rates rise and deals freeze. A 45% rebound is the market thawing. Total first-quarter revenue rose 27.2% to $846.5 million, with leasing commissions up 20.2% and the management and servicing businesses up 21.2%, so the recovery is broad, not confined to one line. After a multi-year commercial real estate slump, those are the numbers of a franchise moving off the bottom.

Underneath the cyclical capital markets sits a base of recurring, steadier revenue that the bull case leans on for ballast. Newmark's filing describes its management-services business, where it provides "property and facilities management services along with project" management to tenants and landlords, a fee stream that does not swing with transaction volumes. The servicing and asset-management portfolio reached $222.1 billion, generating recurring servicing fees regardless of the deal cycle. That mix matters: the firm gets the upside of the capital markets recovery while a meaningful share of its revenue keeps flowing in the lean years, which smooths the violent cyclicality that pure brokerages face.

Management is positioning for the structural growth in the market's most durable corner. The filing points to continued growth in multifamily capital markets, where Newmark provides "integrated investment sales, mortgage brokerage, GSE" lending for housing, a segment supported by the persistent shortage of housing. The firm raised its full-year guidance on the strength of the quarter, to revenue of $3.775 to $3.875 billion and adjusted earnings before interest, tax, depreciation and amortization of $656 to $694 million. For a buyer at today's price, the bull case is a leading commercial real estate services firm with a recovering capital markets engine, a recurring servicing base, and management raising its outlook into the upturn.

Bear Case

The uncomfortable fact for a Newmark holder is that the firm does not control the thing it depends on most. Its revenue rises and falls with commercial property transactions, and those transactions are governed by interest rates, credit availability, and the broader economy, none of which Newmark sets. The recent surge in capital markets revenue is the favorable side of that exposure, but the filing is candid that the environment can turn, citing macroeconomic and geopolitical conditions that "continue to create a complex and challenging economic environment that could adversely affect investors' and users' perception of the economic outlook." A firm whose best quarter in years was driven by a rate-sensitive rebound is a firm whose results can reverse if rates rise again or the economy weakens. The recovery is real, but it is borrowed from a market backdrop that can change.

The valuation has to be read against that cyclicality, and here the methods diverge in a telling way. That asymmetry is the structural risk: when the cycle is good, the earnings justify the price; when it turns, there is no asset base to support the stock, and a services firm's value can fall faster than its revenue. The price already reflects the recovery, paying about 15 times the firm's through-the-cycle operating income and implying roughly 14% annual operating-profit growth for five years, a pace only about half of comparable firms have sustained.

The leverage adds to the cyclical exposure. Net debt sits around $620 million, roughly 1.7 times the firm's mid-cycle operating income, a manageable load in a recovery but a heavier one if transaction volumes fall and the cyclical revenue contracts. The bear case is not that Newmark is poorly run; it is gaining share and ranked among the top firms in real estate dealmaking. The bear case is that the price extrapolates the recovery, the trailing earnings are flattered by the upturn, and a services firm with little asset backing and some leverage is exactly the kind of business whose stock overshoots in both directions of the cycle. Pay the recovery price, and you are betting the rate environment stays friendly.

Valuation

The price is built on through-the-cycle earnings rather than the trough, which is the right way to value a cyclical services firm and worth stating plainly. Trailing earnings were depressed by the commercial real estate downturn, so the framework prices the stock on the company's own mid-cycle margins applied to current revenue. On that basis the price works out to about 15 times normalized operating income, implying roughly 14% annual operating-profit growth for five years. The framework reads that as within range, and the near-term pace is consistent with what the firm has delivered, but only about half of comparable firms have sustained that growth for five full years, so the assumption leans toward the demanding end.

The methods divide along the line that defines an asset-light services business. The reason is structural: a brokerage and services firm earns its value from fee streams and relationships, not from a tangible balance sheet, so the asset lenses understate it by design. The honest read weights the earnings and peer methods, which say the price is reasonable for the recovering earnings, while keeping the asset-based warning in view: there is little tangible cushion if the cycle reverses.

Solvency is moderate and frames the cyclical downside. Net debt of about $620 million is roughly 1.7 times the firm's mid-cycle operating income, serviceable in a recovery but a load that grows heavier if transaction revenue falls. Interest expense is not separately broken out in the latest filings, so a precise coverage figure is unavailable, but the leverage ratio is the figure to watch as the cycle turns. The recurring servicing portfolio of $222.1 billion provides a steadier base of cash flow against that debt. The decisive variable is the rate and transaction environment: if capital markets activity keeps recovering, the through-cycle earnings the price assumes are reachable and the stock is fair; if rates rise and deals freeze again, the trailing trough returns, the asset-light structure offers little support, and the recovery price was too generous.

Catalysts

The capital markets recovery is the catalyst that defines the year. First-quarter capital markets revenue rose 45.5%, leading total revenue up 27.2% to $846.5 million, with leasing up 20.2% and management and servicing up 21.2%. The pace of commercial property transaction activity, driven by interest rates and credit conditions, is the dominant swing factor, because the capital markets line is where the firm's operating leverage is greatest.

The guidance raise signals management's confidence in the upturn. Newmark lifted its full-year 2026 outlook to revenue of $3.775 to $3.875 billion, adjusted earnings per share of $1.87 to $1.98, and adjusted earnings before interest, tax, depreciation and amortization of $656 to $694 million. Whether the firm delivers within that raised range, and whether it raises again or trims, is the clearest read on whether the recovery is accelerating or stalling.

The recurring businesses are the steadier thread. The servicing and asset-management portfolio reached $222.1 billion, and the management-services and servicing-fee lines grew over 20%, providing a base of recurring revenue beneath the cyclical capital markets. Growth in that recurring base, particularly in multifamily lending, is the catalyst that would make the firm's earnings more durable and less dependent on the deal cycle.

Peer Cohorts (Per Segment, With Filing Citations)

Real Estate Services (whole company) (reported)

• JLL (Jones Lang LaSalle Incorporated)
• FY2025 10-K: …revenue, are presented gross on our Consolidated Statements of Comprehensive Income. In contrast, where we act as agent on behalf of clients, third-party costs incurred and the associated revenue are presented net on our Consolidated Statements of Comprehensive Income. Property Management Property Management provides…
• FY2025 10-K: …including product positioning, target tenant identification and competitor analysis through to securing tenants and negotiating leases with terms that reflect our clients' best interests. In 2025, we completed approximately 19,500 agency leasing transactions representing 340 million square feet of space. Tenant…
• CBRE (CBRE GROUP, INC.)
• FY2025 10-K: Item 16. Form 10-K Summary 121 Schedule II - Valuation and Qualifying Accounts 122 SIGNATURES 127 Table of Contents PART I Item 1. Business. Company Overview CBRE is the world's largest commercial real estate services and investments firm (based on 2025 revenue). We derive competitive advantage from our considerable…
• FY2025 10-K: …and loan origination), loan servicing, and valuation. BOE provides a broad suite of integrated, contractually based outsourcing services to occupiers and owners of real estate, including facilities management and property management. Our Project Management business delivers program management, project management and…
• CWK (CUSHMAN & WAKEFIELD LTD.)
• FY2025 10-K: …a gross basis and comprises the entire amount billed to the client, and reported costs of services includes all expenses associated with the client. When the Company is acting as an agent, the Company's fee is reported on a net basis as revenue for reimbursed amounts is netted against the related expenses. Within…
• FY2025 10-K: …may be based on hours incurred, a percentage mark-up on actual costs incurred or a percentage of monthly gross receipts. Additionally, this service line has a large component of revenue that consists of us contracting with third-party providers (engineers, landscapers, etc.) and then passing these expenses on to our…
• CIGI (Colliers International Group Inc.)
• FY2025 40-F: Revenue The Company generates revenue through its provision of commercial real estate services, which are comprised of leasing, capital markets and outsourcing as well as engineering services and investment management, as described below. (a) Leasing Leasing includes landlord and tenant representation brokerage…
• FY2025 40-F: …real estate properties. Such services may involve appraisals of single properties or portfolios of properties. These appraisals may be utilized for a variety of customer needs including acquisitions, dispositions, financing, financial reporting, litigation or for tax purposes. Loan servicing fees consist of revenues…
• BEKE (KE Holdings Inc.)
• FY2025 20-F: …to both landlords and tenants. Leasing agency services revenue is earned from brokerage commissions as the Group facilitates the home lease agreement between tenants and landlords, which is satisfied at a point in time, upon lease execution. Lease term management services provide on-site day-to-day property…
• FY2025 20-F: …Human Resources and Social Security on January 20, 2011 and amended on April 1, 2016. Pursuant to the measures, the real estate brokerage business refers to the activities of providing intermediary and agency services to and collecting commissions from clients by real estate brokerage institutions and real estate…
• OPEN (Opendoor Technologies Inc.)
• FY2025 10-K: …and (ii) amortization of debt issuance costs and debt discounts and interest expense related to our convertible senior notes. (12) Consists mainly of interest earned on cash, cash equivalents, restricted cash and marketable securities. Components of Our Results of Operations Revenue We generate the majority of our…
• FY2025 10-K: …valuation adjustments, if any. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold. Additionally, for the Company's revenues other than home sales revenue, cost of revenue consists of…
• FSV (FirstService Corporation)
• FY2025 40-F: …The loan amounts are measured based on the formula price of the underlying non-controlling interests, and interest rates are determined based on market rates plus a spread. The loans generally have terms of 5 to 10 years, but are open for repayment without penalty at any time. Page 26 of 28 19. Segmented information…
• FY2025 40-F: …in Edmonton, Alberta. Within the FirstService Brands segment, the Company acquired three roofing businesses located in Alberta, Canada, San Diego, California, and Lakeland, Florida, respectively. In addition, the Company acquired a Paul Davis franchisee operating in Pennsylvania, an independent restoration company…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.