Breakeven On The Horizon For OnTheMarket plc (LON:OTMP)

OnTheMarket plc's (LON:OTMP): OnTheMarket plc provides property search services for buyers, sellers, landlords, and tenants in the United Kingdom. The UK£62m market-cap posted a loss in its most recent financial year of -UK£14.5m and a latest trailing-twelve-month loss of -UK£14.5m shrinking the gap between loss and breakeven. The most pressing concern for investors is OTMP’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for OTMP’s growth and when analysts expect the company to become profitable.

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According to the 3 industry analysts covering OTMP, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of UK£12m in 2021. OTMP is therefore projected to breakeven around 2 years from today. How fast will OTMP have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for OTMP given that this is a high-level summary, but, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that OTMP has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. OTMP currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on OTMP, so if you are interested in understanding the company at a deeper level, take a look at OTMP’s company page on Simply Wall St. I’ve also put together a list of important factors you should look at:

1. Valuation: What is OTMP worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether OTMP is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on OnTheMarket’s board and the CEO’s back ground.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.