Key Stats — KE Holdings (BEKE) Q1 2026
- Current price: $188 / RMB 136 (May 19, 2026)
- Q1 2026 revenue: RMB 18.9B, down 19% YoY
- Q1 2026 gross margin: 24.1%, up ~3pp YoY (7-quarter high)
- Q1 2026 non-GAAP operating profit: RMB 1.67B, up 45% YoY
- Q1 2026 non-GAAP operating margin: 8.8%, up ~4pp YoY (7-quarter high)
- Q1 2026 GAAP net income: RMB 1.26B, up 47% YoY
- Q1 2026 non-GAAP net income: RMB 1.61B, up 16% YoY
- Q1 2026 adjusted EPS: RMB 1.42, up ~19% YoY
- Share repurchases in Q1: ~USD 195M
- TIKR model price target: $30 / RMB 218
- Implied upside: ~61%
BEKE’s Cost Overhaul Delivers a 45% Profit Jump While Revenue Falls 19%
KE Holdings (BEKE) delivered RMB 1.67B in non-GAAP operating profit in Q1 2026, up 45% year-over-year, even as revenue fell 19% against a strong prior-year base.
That divergence is the story of the quarter: the company’s cost restructuring from 2025 is now flowing through the income statement in a meaningful way, producing margin expansion at the same time revenue contracts.
Revenue came in at RMB 18.9B, down 19% year-over-year and down 15% quarter-over-quarter, reflecting weaker volumes in both the existing home and new home segments against elevated prior-year comparisons.
Existing home transaction services revenue reached RMB 6.1B, down ~11% year-over-year, with GTV of RMB 534.4B down ~8% year-over-year.
New home transaction revenue came in at RMB 5.1B, down 37% year-over-year, with GTV of RMB 145.9B also down 37% — a steeper decline reflecting continued softness in new developer project activity.
Home renovation and furnishing revenue was RMB 2.3B, down ~21% year-over-year, as the company proactively exited low-quality customer acquisition channels and underperforming cities.
Home rental services held up better, with revenue of RMB 500M, down just ~2% year-over-year, while units under management exceeded 740,000, up ~47% year-over-year, according to CFO Xu Tao on the Q1 2026 earnings call.
Despite the revenue decline, GAAP net income was RMB 1.26B, up 47% year-over-year, and non-GAAP net income was RMB 1.61B, up 16% year-over-year.
The company spent approximately USD 195M on share repurchases during the quarter, up ~40% year-over-year, with cumulative buybacks since September 2022 totaling approximately USD 2.7B, according to CFO Xu Tao on the Q1 2026 earnings call.
Management did not provide specific full-year revenue or EPS guidance on the call, but CFO Xu Tao stated confidence in year-on-year margin improvement for the full year.
KE Holdings’ Margins Hit a 7-Quarter High as Operating Expenses Reach a 3-Year Low
KE Holdings’ income statement tells a clear two-track story: revenue in structural retreat while operating leverage inflects sharply.
Revenue peaked at RMB 31.1B in Q4 2024 before declining through 2025 and into 2026, reaching RMB 18.9B in Q1 2026, the lowest reading across the eight quarters visible in the income statement.
Gross margin moved in the opposite direction, contracting from 27.9% in Q2 2024 to a low of 20.7% in Q1 2025, then recovering steadily to 21.9%, 21.4%, 21.4%, and now 24.1% in Q1 2026.
The Q1 2026 gross margin of 24.1% represents a 3.4pp improvement year-over-year and a 2.7pp improvement quarter-over-quarter.
Operating income swung from a loss of RMB 147M in Q4 2025 to a profit of RMB 1.27B in Q1 2026, a recovery of RMB 1.4B in a single quarter.
Operating margin reached 6.7% in Q1 2026, up 4.2pp year-over-year and 7.4pp quarter-over-quarter.
Total operating expenses were RMB 3.29B in Q1 2026, the lowest level in nearly three years and down 22% year-over-year, according to CFO Xu Tao on the Q1 2026 earnings call.
BEKE Stock Trades 61% Below TIKR’s Target as Earnings Expansion Builds the Case
The TIKR valuation model places a mid-case price target of $30 (approximately RMB 218) on KE Holdings stock, implying ~61% total upside from the current price of $19 (around RMB 136) over 4 and a half years.
The mid-case assumes a revenue CAGR of (0.5%), meaning the model does not require revenue recovery to produce the target return — the path to $30 is built on margin expansion and EPS growth, not top-line acceleration.
The model’s mid-case embeds a net income margin assumption of 8.7%, compared to the historical 1-year margin of 7.7%, and an EPS CAGR of 12.8% — alongside a P/E multiple compression of (2.0%) per year, meaning the target price requires the market to gradually de-rate the multiple even as earnings grow.
Q1 2026 validates the core earnings expansion thesis: non-GAAP operating margin hit 8.8%, a 7-quarter high, and GAAP net income grew 47% year-over-year while revenue fell.
For KE Holdings stock, the Q1 print strengthens the case that cost restructuring is durable rather than cyclical — the investment argument is cleaner today than before the report.
The real question KE Holdings stock raises after Q1 is whether margin expansion driven by cost cuts can sustain without revenue eventually recovering to carry the full weight of the thesis.
Should You Invest in KE Holdings Inc.?
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