1 Unstoppable Stock to Buy Before Oct. 29 (It's Already Crushing Nvidia This Year)
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Douglas Elliman operates a top luxury residential real estate brokerage service across the U.S.
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The company is on track to sell more real estate in 2025 than it sold in 2024, despite a very sluggish housing market.
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The Federal Reserve is expected to cut interest rates again this month, which will be a tailwind for Douglas Elliman’s business.
The U.S. Federal Reserve cut the federal funds rate (overnight interest rate) three times in the closing months of 2024, and on Sept. 17, it delivered the first cut of 2025. The Fed is scheduled to host its next two-day policy meeting on Oct. 28 and 29, and based on the central bank’s latest forecast, another cut is on the table. Wall Street appears to agree because the CME Group‘s FedWatch tool predicts a 92% chance of a reduction.
The real estate sector is very sensitive to changes in interest rates. Rising rates can put the brakes on the housing market by constricting consumers’ borrowing power, whereas falling rates typically drive a flurry of activity as mortgages become more attainable. Douglas Elliman (NYSE: DOUG) is the fifth-largest residential real estate brokerage company in the U.S., so it could experience a significant growth phase if interest rates continue trending lower.
Douglas Elliman stock is already up 75% this year, crushing some of the best stocks in the high-growth artificial intelligence (AI) industry — including Nvidia, which has returned just 36%. Here’s why it might still be a great buy ahead of the Fed’s next meeting.
Douglas Elliman was founded in 1911, so it has a century’s worth of experience navigating peaks and troughs in the real estate market. Today, it employs around 6,600 agents across 111 offices across the U.S., specializing in high-end luxury markets in New York, California, Texas, and more.
Douglas Elliman sold $20.1 billion worth of real estate during the first half of 2025, so it’s on track to exceed its 2024 total of $36.4 billion. That would be an impressive accomplishment considering U.S. existing home sales are near their lowest level in five years, which is a function of the Fed’s aggressive interest rate hikes between 2022 and 2023.
It will take some time for the benefits of interest rate cuts to work their way through the economy, but they will almost certainly spark activity in the housing market eventually. However, Douglas Elliman isn’t waiting around, because it has used this sluggish period in the real estate sector as an opportunity to diversify its business.
The company launched Elliman International in June, bringing its prestigious brokerage business to regions like the Middle East, Latin America, and Europe. It then announced Elliman Capital in July, which is an in-house mortgage platform designed to assist buyers with their financing needs, unlocking an entirely new revenue stream.
Douglas Elliman generated $524.7 million in revenue during the first half of 2025, which was an 8% increase from the year-ago period. The company also carefully managed costs during the first six months of the year, driving an improvement in its bottom line.
Douglas Elliman still lost $28.6 million during the period on a generally accepted accounting principles (GAAP) basis, but that was much better than the $43.1 million loss it generated in the first six months of 2024.
After stripping out one-off and non-cash expenses, the company’s adjusted (non-GAAP) EBITDA was actually positive to the tune of $260,000 in the first half of 2025 — a big improvement from its adjusted EBITDA loss of $14.7 million a year ago.
Douglas Elliman is in a great financial position, because it has $136.3 million in cash on hand with just $50 million in debt — but it’s actually convertible debt that can be swapped for stock at just $1.50 per share in 2029. Since a single share trades for around $2.90 as I write this, Douglas Elliman probably won’t have to repay the principal in cash (as things currently stand).
Based on the company’s market capitalization of $252 million and its trailing 12-month revenue of $1.03 billion, its stock trades at a price-to-sales (P/S) ratio of just 0.23. If we factor in its net cash position, it looks even cheaper.
Douglas Elliman’s P/S ratio peaked at around 0.8 during the last housing boom in 2021. I’m not suggesting it will return to that level, but if falling interest rates drive an acceleration in the company’s revenue growth (which is probable), a higher valuation is certainly on the table.
Plus, Douglas Elliman stock is cheap relative to some of its peers. Compass, which is America’s largest residential real estate brokerage company, trades at a P/S ratio of 0.63. That’s a 174% premium to Douglas Elliman’s valuation. Plus, back in July, residential real estate brokerage powerhouse Redfin was acquired by Rocket Companies for $1.75 billion, representing a P/S ratio of around 1.7 at the time.
One interest rate decision probably won’t change Douglas Elliman’s fortunes, but it looks like a great buy ahead of Oct. 29 based purely on its attractive valuation, and the momentum in its business. Keep in mind the company reportedly rejected a takeover bid of around $5 per share earlier this year, suggesting management sees significantly more upside from that level.
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Anthony Di Pizio has positions in Douglas Elliman. The Motley Fool has positions in and recommends Nvidia and Rocket Companies. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy.
1 Unstoppable Stock to Buy Before Oct. 29 (It’s Already Crushing Nvidia This Year) was originally published by The Motley Fool