What's Driving KE Holdings Inc's Surprising 13% Stock Rally?

KE Holdings Inc (BEKE, Financial), a prominent player in the real estate industry, has seen a significant surge in its stock price over the past three months. As of October 6, 2023, the company's market cap stands at $19.7 billion, with its stock price at $15.83. Over the past week, the stock price has seen a gain of 2.32%, and over the past three months, it has risen by an impressive 13.11%. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. Currently, the GF Value of KE Holdings Inc is $17.67, slightly lower than the past GF Value of $18.35 three months ago. Despite this, the company's stock remains modestly undervalued, similar to its valuation three months ago.

Company Overview

KE Holdings Inc operates an integrated online and offline platform for housing transactions and services in the People's Republic of China. Through its Beike platform, the company has revolutionized how service providers and housing customers navigate and consummate housing transactions. These transactions range from existing and new home sales, home rentals, to home renovation, real estate financial solutions, and other services. The company operates in four segments: Existing home transaction services; New home transaction services; Home renovation and furnishing; and Emerging and other services. The majority of the company's revenue is generated from the New home transaction services segment. 1710312855191945216.png

Profitability Analysis

KE Holdings Inc's Profitability Rank stands at 4 out of 10 as of June 30, 2023. The company's Operating Margin is 8.73%, better than 41.46% of the companies in the industry. The company's ROE is 7.35%, better than 68.76% of the companies in the industry. The ROA is 4.60%, better than 78.03% of the companies in the industry. The ROIC is 7.02%, better than 83.79% of the companies in the industry. Over the past decade, the company has had 1 year of profitability, better than 3.45% of the companies in the industry. 1710312875790172160.png

Growth Prospects

The company's Growth Rank is 5 out of 10. The 3-Year Revenue Growth Rate per Share is 9.90%, better than 65.79% of the companies in the industry. The 5-Year Revenue Growth Rate per Share is 20.50%, better than 85.32% of the companies in the industry. The Total Revenue Growth Rate (Future 3Y To 5Y Est) is 2.80%, better than 26.62% of the companies in the industry. The 3-Year EPS without NRI Growth Rate is 23.60%, better than 74.8% of the companies in the industry. The EPS Growth Rate (Future 3Y To 5Y Est) is 17.00%, better than 72.5% of the companies in the industry. 1710312893372694528.png

Major Holders

The top three holders of KE Holdings Inc's stock are Jim Simons (Trades, Portfolio), Matthews Pacific Tiger Fund (Trades, Portfolio), and Baillie Gifford (Trades, Portfolio). Jim Simons (Trades, Portfolio) holds 9,164,994 shares, accounting for 0.73% of the company's stock. Matthews Pacific Tiger Fund (Trades, Portfolio) holds 3,935,772 shares, accounting for 0.32% of the company's stock. Baillie Gifford (Trades, Portfolio) holds 1,609,164 shares, accounting for 0.13% of the company's stock.

Competitors

KE Holdings Inc operates in a competitive industry with major players such as Jones Lang LaSalle Inc(JLL, Financial) with a market cap of $6.38 billion, CoStar Group Inc(CSGP, Financial) with a market cap of $32.27 billion, and WeWork Inc(WE, Financial) with a market cap of $123.980 million.

Conclusion

In conclusion, KE Holdings Inc has shown impressive stock performance, profitability, and growth. Despite the competitive nature of the real estate industry, the company has managed to maintain a strong position. The company's future prospects look promising based on the analyzed data, and it will be interesting to see how the company continues to perform in the future.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.