eXp World Holdings Inc’s (NASDAQ:EXPI): eXp World Holdings, Inc. provides cloud-based real estate brokerage services for residential real estate market in the United states and Canada. The US$641m market-cap posted a loss in its most recent financial year of -US$22.1m and a latest trailing-twelve-month loss of -US$29.0m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which EXPI will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for EXPI.
See our latest analysis for eXp World Holdings
Consensus from the 3 Real Estate analysts is EXPI is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$3.4m in 2020. EXPI is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which EXPI must grow year-on-year. It turns out an average annual growth rate of 90% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving EXPI’s growth isn’t the focus of this broad overview, but, take into account 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 EXPI has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. This means that EXPI has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of EXPI which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at EXPI, take a look at EXPI’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:
- Valuation: What is EXPI 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 EXPI is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on eXp World Holdings’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.