KE Holdings Inc American Depositary Shares (each representing three Class A Ordinary Shares) (BEKE)

FairStock Score: 32/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach KE Holdings as a Chinese real estate services platform running Beike and Lianjia. In fiscal Q2 2026, it reported revenue of $24.5B and net income of $2.6B, a 10.69% margin. That is real profit, and the cash generation is striking: trailing free cash flow is $7.1B against a $17.7B market cap, a 39.8% FCF yield by FairStock's calculation. Debt is modest with a D/E of 0.22, and the Piotroski F-Score is a perfect 9/9. But I ask what protects this business. The top line is not growing—the provided revenue growth figure is negative—and the returns are thin: FairStock shows ROE of 7.00% and ROCE of 2.57%. The Altman Z-Score of 0.90 is a warning sign, not a comfort. At the 2026-10-13 close of $17.59, FairStock's P/E is 27.92, P/B is 2.00, PEG is 0.27, and EV/EBITDA is 2.93. The Graham Number is $16.71, so the margin of safety is -5.27%; I am paying slightly above a conservative value. The low EV/EBITDA and huge FCF yield suggest the market fears China property stress, while the high P/E and weak ROCE say the business is not a wide-moat compounder. A bargain hunter wants a durable franchise at a discount. Here the balance sheet is sound and cash flow is exceptional, but the decline in revenue and low returns on capital mean I cannot call it clearly cheap. I would need evidence that revenue is stabilizing and returns are improving before treating the cash flow as durable.

In plain English: KE Holdings runs a large online and offline platform for housing transactions and services in China, including Beike and Lianjia. It is profitable and produces a lot of cash, but sales have been shrinking and the returns on the money invested in the business are low. At $17.59, the shares look a bit expensive compared with earnings and a conservative value estimate.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer