When Will Fangdd Network Group Ltd. (NASDAQ:DUO) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Fangdd Network Group Ltd.'s (NASDAQ:DUO) future prospects. Fangdd Network Group Ltd. operates as an online real estate marketplace in the People’s Republic of China. With the latest financial year loss of CN¥1.3b and a trailing-twelve-month loss of CN¥1.5b, the US$564m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Fangdd Network Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Fangdd Network Group

Consensus from 3 of the American Interactive Media and Services analysts is that Fangdd Network Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CN¥255m in 2022. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 101% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Fangdd Network Group's growth isn’t the focus of this broad overview, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 29% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Fangdd Network Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fangdd Network 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 Fangdd Network 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 Fangdd Network 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 Fangdd Network 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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