Foxtons Group plc (LON:FOXT) Is About To Turn The Corner

Foxtons Group plc (LON:FOXT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Foxtons Group plc, an estate agency, provides services to the residential property market in the United Kingdom. The UK£205m market-cap company announced a latest loss of UK£3.2m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Foxtons Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Foxtons Group

Foxtons Group is bordering on breakeven, according to the 2 British Real Estate analysts. They expect the company to post a final loss in 2020, before turning a profit of UK£3.7m in 2021. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 112%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Foxtons Group's growth isn’t the focus of this broad overview, but, keep in mind that generally 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. Foxtons Group currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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:

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

1. Valuation: What is Foxtons 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 Foxtons 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 Foxtons 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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