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When Will Fangdd Network Group Ltd. (NASDAQ:DUO) Become Profitable?

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  • DUO

We feel now is a pretty good time to analyse Fangdd Network Group Ltd.'s (NASDAQ:DUO) business as it appears the company may be on the cusp of a considerable accomplishment. Fangdd Network Group Ltd. operates as an online real estate marketplace in the People’s Republic of China. The US$656m market-cap company posted a loss in its most recent financial year of CN¥1.3b and a latest trailing-twelve-month loss of CN¥1.5b leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Fangdd Network Group 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.

View our latest analysis for Fangdd Network Group

Fangdd Network Group is bordering on breakeven, according to the 3 American Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of CN¥255m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 101% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Fangdd Network Group's upcoming projects, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 29% 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.

Next Steps:

There are too many aspects of Fangdd Network Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fangdd Network Group's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is Fangdd Network Group 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 Fangdd Network Group 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 Fangdd Network Group’s 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.

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.

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