To The Moon

$KE Holdings Inc.(BEKE)$ is scheduled to report its unaudited financial results for the Third Quarter of 2025 on Monday, November 10, 2025, before the U.S. market opens.

As a leading integrated online and offline platform for housing transactions and services in China, the company's performance is heavily influenced by the macroeconomic environment and real estate policies in China.

Based on the latest analyst forecasts, here are the consensus estimates for the third quarter of fiscal year 2025:

KE Holdings Inc. (BEKE) Fiscal Q2 2025 Earnings Summary

The Q2 2025 results were characterized by mixed signals: strong revenue and network expansion, but a notable decline in net profitability, largely due to high costs in diversification segments and margin compression in the core business.

Key Financial Highlights (Q2 2025 vs. Q2 2024)

Operational & Strategic Highlights

Strong Diversification: Revenues from Non-Housing Transaction Services (Home Renovation/Furnishing and Home Rentals) hit a record high of 41% of total revenues. Home Rental services revenue surged 78.0% YoY.

Network Expansion: Active Stores increased 32.1% YoY, and Active Agents increased 19.5% YoY. This aggressive expansion strengthens market position but increases near-term operating costs.

Capital Allocation: The company announced an upsizing and extension of its share repurchase program from $3 billion to $5 billion through August 2028, signaling management's confidence and commitment to shareholder value.

Lessons Learned from Management Guidance & Commentary

The most important insights for investors and traders come from the context and guidance management provided:

The Core Focus is Shifting from Scale to Efficiency

Lesson: The days of pure growth at any cost are over. KE Holdings is moving into a "new phase of efficiency-driven development."

Evidence: CEO Stanley Peng commented on leveraging AI technology and scientific management to enhance productivity. This is a direct response to the market slowdown and a necessity for mitigating rising labor costs associated with their expanded network.

Investor Implication: Investors should prioritize agent and store productivity metrics (e.g., GTV per agent) in future reports over simply the raw count of agents/stores.

Diversification is a Growth Driver but a Profit Headwind (Currently)

Lesson: The success of the Home Renovation and Home Rental segments provides crucial revenue diversification, but these are lower-margin businesses than the traditional existing home transaction service.

Evidence: The rapid revenue growth in Home Rentals and the network expansion for Renovation services contributed to the overall Gross Margin compression (from 27.9% to 21.9%). The increased costs in these segments were specifically cited as a primary driver for the decline in net income.

Investor Implication: The company needs to demonstrate unit economics improvement and a clear path to profitability in the Home Renovation/Rental segments to justify the investment costs.

Fixed Costs and Market Softening are Pressuring Margins

Lesson: The decline in profit was not just a one-time issue; it was structurally driven by margin compression in the core business.

Evidence: The contribution margin for existing home transactions declined YoY, primarily due to higher fixed labor costs resulting from the company's agent welfare improvement strategy and general network expansion. A softening property market further reduced transaction-based commission revenue.

Investor Implication: KE Holdings must successfully implement its cost reductions and efficiency enhancements (as mentioned in the call) in the subsequent quarters to reverse this margin trend. Q3 2025 results will be a key test of their operational execution.

KE Holdings is demonstrating resilience and market-outperformance in a tough macro environment by expanding its network and diversifying its revenue. However, the market's key concern moving forward is profitability, as their aggressive expansion and diversification strategy are currently coming at the cost of significantly compressed margins.

Key Metrics Investors Should Watch

KE Holdings' business model is centered on the volume and value of real estate transactions. Therefore, investors should focus on these primary indicators:

Transaction Volume & Value

Gross Transaction Value (GTV): This is the most critical metric. GTV is broken down by segment and indicates the overall health of the platform.

Existing Home Transaction Services GTV: The existing home market can be an indicator of market liquidity and stability.

New Home Transaction Services GTV: This segment has seen growth in the past, often through strategic collaborations with developers. Changes here reflect the broader primary housing market health.

Net Revenue: Look for how revenue growth compares to GTV growth, which can indicate changes in the platform's take rate (the percentage commission earned on transactions).

Operational Efficiency & Network Size

Active Stores on Platform: An increasing or stable number suggests continued platform adoption and trust from brokerage firms.

Active Agents on Platform: This reflects the platform's ability to attract and retain real estate professionals, which is crucial for service quality and market share.

Average Revenue per Store/Agent: Improvements here indicate better efficiency and productivity across the platform.

Financial Health

Non-GAAP Net Income (or Adjusted EBITDA): Non-GAAP figures often strip out one-time items and share-based compensation, providing a clearer view of core operational profitability.

Cash Position and Free Cash Flow (FCF): In the face of a potentially volatile market, the company's liquidity is important. A strong cash position supports its share repurchase program and long-term investments.

Guidance for Q4 2025: Management's outlook for the subsequent quarter and the full year will be critical, as it provides insight into their expectations for the Chinese housing market and regulatory environment.

KE Holdings (BEKE) Price Target

Based on 6 Wall Street analysts offering 12 month price targets for KE Holdings Inc. Sponsored ADR Class A in the last 3 months. The average price target is $23.05 with a high forecast of $25.00 and a low forecast of $22.00. The average price target represents a 45.89% change from the last price of $15.80.

Short-Term Trading Opportunities Post-Earnings

Trading around earnings involves significant risk, especially for companies exposed to the regulatory and economic factors of the Chinese market. Potential short-term opportunities would likely stem from a significant surprise relative to analyst consensus:

Important Trading Considerations:

Volatility: Earnings for Chinese tech and real estate-related companies can be highly volatile due to country-specific policy risks. Post-market or pre-market trading can be erratic.

Consensus vs. Reality: Consensus EPS for Q3 2025 is an estimate of $0.09. A substantial deviation from this figure, combined with future guidance, is what typically drives large post-earnings moves.

Technical Levels: Traders should identify key support and resistance levels before the announcement to anticipate where the stock price might stabilize after the initial reaction.

Summary

KE Holdings Inc. is set to report Q3 2025 earnings on Monday, November 10, 2025. The results will be crucial for assessing the company's performance against the backdrop of a challenging and volatile Chinese property market.

Key Metrics to Watch:

Gross Transaction Value (GTV): The primary indicator of transaction activity in China's housing market, broken down into Existing Home and New Home sales. Analyst consensus estimates GTV for Q3 2025 will be near RMB 23.1 Billion in revenue.

Profitability/Margins: Following significant gross margin compression in Q2 due to diversification and network expansion costs, investors need to see improvement in Non-GAAP Net Income.

Guidance: The outlook provided for Q4 2025 and 2026 will be the most critical factor, signaling management's confidence in market stability and their efficiency-driven strategy.

Short-Term Trading Opportunity:

The stock is expected to be highly volatile post-earnings. A significant beat on the lower consensus EPS (estimated at $0.449 per share) combined with optimistic guidance on operational efficiency or policy support could drive a sharp rally. Conversely, a miss on GTV or weak Q4 guidance due to macro headwinds will likely lead to a substantial sell-off. The key is a surprise in either direction relative to already tempered expectations.

Appreciate if you could share your thoughts in the comment section whether you think KE holdings would present a mixed signal Q3 earnings with strong revenue but decline in net profitability.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.