Stock Analysis

Fathom Holdings Inc. (NASDAQ:FTHM) Is Expected To Breakeven In The Near Future

NasdaqCM:FTHM
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at Fathom Holdings Inc.'s (NASDAQ:FTHM) future prospects. Fathom Holdings Inc. provides cloud-based real estate brokerage services in the South, Atlantic, Southwest, and Western parts of the United States. The US$480m market-cap company posted a loss in its most recent financial year of US$1.3m and a latest trailing-twelve-month loss of US$4.7m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Fathom Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Fathom Holdings

Fathom Holdings is bordering on breakeven, according to the 2 American Real Estate analysts. They expect the company to post a final loss in 2021, before turning a profit of US$2.3m in 2022. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 83%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqCM:FTHM Earnings Per Share Growth May 20th 2021

We're not going to go through company-specific developments for Fathom Holdings given that this is a high-level summary, but, take into account that by and large 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 1.8% 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.

Advertisement

Next Steps:

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

  1. Historical Track Record: What has Fathom Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Fathom Holdings' 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.

If you decide to trade Fathom Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


New: AI Stock Screener & Alerts

Our new AI Stock Screener scans the market every day to uncover opportunities.

• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies

Or build your own from over 50 metrics.

Explore Now for Free

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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

About NasdaqCM:FTHM

Fathom Holdings

Provides a real estate services platform that integrates residential brokerage, mortgage, title, and insurance services in the United States.

Flawless balance sheet slight.

Advertisement