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eXp World Holdings, Inc.'s (NASDAQ:EXPI) Profit Outlook

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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$720m market-cap company’s loss lessens since it announced a -US$22.4m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$18.0m, as it approaches breakeven. The most pressing concern for investors is EXPI’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for EXPI, its year of breakeven and its implied growth rate.

See our latest analysis for eXp World Holdings

EXPI is bordering on breakeven, according to the 3 Real Estate analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$8.0m in 2021. EXPI is therefore projected to breakeven around 2 years from now. 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 96% is expected, 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, June 8th 2019
NasdaqGM:EXPI Past and Future Earnings, June 8th 2019

Given this is a high-level overview, I won’t go into details of EXPI’s upcoming projects, 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 I wrap up, there’s one aspect worth mentioning. EXPI has managed its capital prudently, with debt making up 8.6% 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:

There are too many aspects of EXPI to cover in one brief article, but the key fundamentals for the company can all be found in one place – EXPI’s company page on Simply Wall St. I’ve also put together a list of pertinent factors 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.