CBRE - Marcus & Millichap: Starting To Get Interesting

Summary

• Marcus & Millichap shares have fallen 30% year-to-date as commercial property sales volumes deteriorate following rapid interest rate hikes.
• Marcus & Millichap occupies a profitable niche focusing on small (sub $10 million) commercial properties transacted by wealthy individuals.
• The company has a long history of profitable growth and has a very strong balance sheet with over $500 million in net cash.
• While shares appear very cheap on trailing twelve-month results, the rapid slowdown in commercial property sales suggests results will deteriorate from record levels.
• I see Marcus & Millichap as slightly undervalued today but would be interested in owning the stock should it dip below $27.

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