Purplebricks Group plc (LON:PURP) Could Be Less Than A Year Away From Profitability

We feel now is a pretty good time to analyse Purplebricks Group plc's (LON:PURP) business as it appears the company may be on the cusp of a considerable accomplishment. Purplebricks Group plc engages in the real estate agency business in the United Kingdom. With the latest financial year loss of UK£12m and a trailing-twelve-month loss of UK£5.0m, the UK£285m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Purplebricks Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Purplebricks Group

Purplebricks Group is bordering on breakeven, according to the 3 British Real Estate analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£4.6m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 55% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Purplebricks Group's upcoming projects, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Purplebricks Group currently 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. The company 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:

There are too many aspects of Purplebricks Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Purplebricks Group's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Purplebricks Group 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 Purplebricks Group 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 Purplebricks Group’s board and the CEO’s background.
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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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