When Will eXp World Holdings, Inc. (NASDAQ:EXPI) Become Profitable?

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. On 31 December 2018, the US$661m market-cap posted a loss of -US$22.4m for its most recent financial year. As path to profitability is the topic on EXPI’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for EXPI.

View our latest analysis for eXp World Holdings

EXPI is bordering on breakeven, according to the 3 Real Estate analysts. They expect the company to post a final loss in 2019, before turning a profit of US$2.7m in 2020. So, EXPI is predicted to breakeven approximately a couple of months from now! What rate will EXPI have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 102%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:EXPI Past and Future Earnings, March 20th 2019
NasdaqGM:EXPI Past and Future Earnings, March 20th 2019

I’m not going to go through company-specific developments for EXPI given that this is a high-level summary, but, bear in mind that typically 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 managed its capital prudently, with debt making up 8.8% of equity. This means that EXPI 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:

This article is not intended to be a comprehensive analysis on EXPI, so if you are interested in understanding the company at a deeper level, take a look at EXPI’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:

  1. 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.
  2. 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.
  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.