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

Simply Wall St

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$745m market-cap posted a loss in its most recent financial year of -US$22.4m and a latest trailing-twelve-month loss of -US$15.6m shrinking the gap between loss and breakeven. The most pressing concern for investors is EXPI’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for EXPI.

View our latest analysis for eXp World Holdings

According to the 3 industry analysts covering EXPI, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$3.7m in 2020. Therefore, EXPI is expected to breakeven roughly a few months from now. How fast will EXPI have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 124% year-on-year, on average, 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, December 12th 2019
NasdaqGM:EXPI Past and Future Earnings, December 12th 2019

Underlying developments driving EXPI’s growth isn’t the focus of this broad overview, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that EXPI has managed its capital judiciously, with debt making up 6.2% 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 put together a list of key aspects you should look at:

  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.

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.

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. Thank you for reading.