Latest news with #BEKE
Yahoo
02-05-2025
- Business
- Yahoo
Why KE Holdings Inc (BEKE) Is Surging In 2025
We recently published a list of . In this article, we are going to take a look at where KE Holdings Inc (NYSE:BEKE) stands against other real estate stocks that are surging in 2025. For years, real estate stocks have been a source of anxiety for investors due to the scars of the Great Recession. That crisis has led to lingering skepticism, and many see real estate as a no-go zone today due to GDP growth turning negative quarter-over-quarter and expectations of a recession. Investors fear that a recession could drag these stocks down once more. However, these companies have learned from the Great Recession, and some of them have delivered stellar gains so far. It is a good idea to keep an eye on the winners, as they could outperform during market downturns. Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified in another article For this article, I screened the best-performing real estate stocks year-to-date. I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Aerial shot of a modern real estate development with residential homes. Number of Hedge Fund Holders In Q4 2024: 47 KE Holdings Inc (NYSE:BEKE) operates China's leading integrated online and offline platform for housing transactions and services, connecting buyers, sellers, renters, and service providers through its Beike and Lianjia brands. The stock's sharp rise in 2025 is primarily driven by its March 18 announcement that its Class A ordinary shares were included in both the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs. On the same day, KE Holdings reported strong fourth-quarter and full-year 2024 financial results, which included a final cash dividend. The consensus price target of $27.26 implies 31.6% upside. BEKE stock is up 14.90% year-to-date. Overall, BEKE ranks 15th on our list of real estate stocks that are surging in 2025. While we acknowledge the potential of BEKE, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BEKE but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
08-04-2025
- Business
- Yahoo
Why KE Holdings Inc. (BEKE) Went Down On Monday?
We recently published a list of . In this article, we are going to take a look at where KE Holdings Inc. (NYSE:BEKE) stands against other Chinese stocks that performed worst on Monday. Wall Street's main indices finished mixed on Monday as investors remained cautious amid the escalating trade tensions globally, with President Donald Trump threatening to slap China anew with a 50-percent tariff if the latter does not withdraw its countermeasure. The tech-heavy Nasdaq was the sole gainer during the day, up 0.10 percent. In contrast, the Dow Jones declined by 0.91 percent and the S&P 500 dropped by 0.23 percent. Meanwhile, 10 companies—predominantly Chinese stocks—were sold down as investors moved away to minimize the potential risks from the trade war. In this article, we have identified Monday's worst performers and detailed the reasons behind their drop. To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume. Aerial shot of a modern real estate development with residential homes. KE Holdings dropped for a second day on Monday, shedding 6.49 percent to end at $18.29 apiece as investors sold off positions on Chinese stocks amid the ongoing trade tensions between the United States and China. BEKE is a Chinese property holding company that engages in online and offline platforms for housing transactions and services. In recent news, it announced a dividend of $0.12 per ordinary share, or $0.36 per ADS, to holders of ordinary shares and ADS as of record date April 9, 2025, for Beijing, Hong Kong, and US time zones. The aggregate amount will be approximately $400 million and will be funded by a cash surplus on the company's balance sheet. In the fourth quarter of the year, BEKE's net income dropped by 13.9 percent to RMB577 million from RMB670 million in the same period a year earlier, despite revenues growing by 55 percent to RMB31 million from RMB20 million. For the full year 2024, net income declined by 30.7 percent to RMB4.078 billion from RMB5.889 billion, while revenues increased by 20.8 percent to RMB93 billion from RMB77 billion year-on-year. Overall, BEKE ranks 10th on our list of Chinese stocks that performed worst on Monday. While we acknowledge the potential of BEKE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BEKE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
19-03-2025
- Business
- Yahoo
KE Holdings Inc.'s (NYSE:BEKE) Stock Is Going Strong: Have Financials A Role To Play?
KE Holdings' (NYSE:BEKE) stock is up by a considerable 25% over the past three months. Given that stock prices are usually aligned with a company's financial performance in the long-term, we decided to study its financial indicators more closely to see if they had a hand to play in the recent price move. In this article, we decided to focus on KE Holdings' ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. Check out our latest analysis for KE Holdings The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for KE Holdings is: 5.7% = CN¥4.1b ÷ CN¥71b (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.06. We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. At first glance, KE Holdings' ROE doesn't look very promising. Next, when compared to the average industry ROE of 7.7%, the company's ROE leaves us feeling even less enthusiastic. However, we we're pleasantly surprised to see that KE Holdings grew its net income at a significant rate of 51% in the last five years. Therefore, there could be other reasons behind this growth. Such as - high earnings retention or an efficient management in place. As a next step, we compared KE Holdings' net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 4.0%. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Has the market priced in the future outlook for BEKE? You can find out in our latest intrinsic value infographic research report. KE Holdings' significant three-year median payout ratio of 69% (where it is retaining only 31% of its income) suggests that the company has been able to achieve a high growth in earnings despite returning most of its income to shareholders. While KE Holdings has been growing its earnings, it only recently started to pay dividends which likely means that the company decided to impress new and existing shareholders with a dividend. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 19% over the next three years. Accordingly, the expected drop in the payout ratio explains the expected increase in the company's ROE to 14%, over the same period. Overall, we feel that KE Holdings certainly does have some positive factors to consider. While no doubt its earnings growth is pretty substantial, we do feel that the reinvestment rate is pretty low, meaning, the earnings growth number could have been significantly higher had the company been retaining more of its profits. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
08-03-2025
- Business
- Yahoo
KE Holdings Inc. (NYSE:BEKE): Riding the Real Estate Wave
We came across a bullish thesis on KE Holdings Inc. (NYSE:BEKE) on ValueInvestorsClub by Weighing Machine Capital. In this article, we will summarize the bulls' thesis on BEKE. The company's shares were trading at $20.25 when this thesis was published, vs. the closing price of $24.26 on Mar 07. BEKE operates an integrated online and offline platform for housing transactions and services in China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. It covers over 100 cities in China and operates 45,000 stores with monthly active users (MAU) close to 50 million. BEKE offers end to end housing solutions with a vast network of agents who have access to AI tools which can be leveraged to understand the customer dynamics. It has a competitive advantage over its rival Anjuke due to its diversified offerings that include financing, home renovation and community development. An additional offline source is also key to expanding BEKE's business since the online platform is highly competitive with Anjuke's capturing higher traffic. The industry is also favorable for big players like BEKE who have leveraged on digital transformation to access more customers. The online penetration is expected to touch 50% in 2030, up from 15% in 2024. The policies have also been favorable as interest rates, tax burden and percentage of down payment have been lowered. Local governments have been empowered to cancel restrictive measures related to home purchases and urbanization of 1 million houses is on the cards. These measures will give BEKE access to more inventory and increase the volume of transactions done. BEKE trades below 20x its earnings multiple making it an undervalued stock offering sufficient growth prospects and competitive advantage. Its Enterprise to Gross Profit ratio is 5.5x which is much lower than its peers. The profitability is also improving and this justifies a multiple of 25x. Based on a higher multiple, the fair value of the stock should be $31-32, offering a potential gain of 33% from its current price. While we acknowledge the potential of BEKE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BEKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
27-01-2025
- Business
- Yahoo
KE Holdings Inc.'s (NYSE:BEKE) Intrinsic Value Is Potentially 66% Above Its Share Price
The projected fair value for KE Holdings is US$28.49 based on 2 Stage Free Cash Flow to Equity Current share price of US$17.11 suggests KE Holdings is potentially 40% undervalued The CN¥24.56 analyst price target for BEKE is 14% less than our estimate of fair value Does the January share price for KE Holdings Inc. (NYSE:BEKE) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. View our latest analysis for KE Holdings We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (CN¥, Millions) CN¥11.2b CN¥12.7b CN¥13.8b CN¥14.8b CN¥15.6b CN¥16.3b CN¥17.0b CN¥17.6b CN¥18.2b CN¥18.8b Growth Rate Estimate Source Analyst x3 Analyst x3 Est @ 8.93% Est @ 7.04% Est @ 5.71% Est @ 4.78% Est @ 4.13% Est @ 3.68% Est @ 3.36% Est @ 3.14% Present Value (CN¥, Millions) Discounted @ 8.4% CN¥10.3k CN¥10.8k CN¥10.8k CN¥10.7k CN¥10.4k CN¥10.1k CN¥9.7k CN¥9.2k CN¥8.8k CN¥8.4k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CN¥99b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = CN¥19b× (1 + 2.6%) ÷ (8.4%– 2.6%) = CN¥333b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥333b÷ ( 1 + 8.4%)10= CN¥148b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥247b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$17.1, the company appears quite good value at a 40% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at KE Holdings as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 1.166. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Real Estate market. Opportunity Annual earnings are forecast to grow faster than the American market. Trading below our estimate of fair value by more than 20%. Threat Revenue is forecast to grow slower than 20% per year. Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a discount to intrinsic value? For KE Holdings, we've compiled three fundamental elements you should assess: Risks: For example, we've discovered 3 warning signs for KE Holdings that you should be aware of before investing here. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for BEKE's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
