We feel now is a pretty good time to analyse Fathom Holdings Inc.'s (NASDAQ:FTHM) business as it appears the company may be on the cusp of a considerable accomplishment. Fathom Holdings Inc. provides cloud-based real estate brokerage services in the South, Atlantic, Southwest, and Western parts of the United States. With the latest financial year loss of US$12m and a trailing-twelve-month loss of US$19m, the US$107m market-cap company amplified its loss by moving further away from its breakeven target. 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 2 of the American Real Estate analysts is that Fathom Holdings is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$9.5m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Fathom Holdings' growth isn’t the focus of this broad overview, however, bear in mind that generally 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 prudently, with debt making up 9.1% 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.
There are too many aspects of Fathom Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fathom Holdings' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Valuation: What is Fathom Holdings 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 Fathom Holdings is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Fathom Holdings’s board and the CEO’s background.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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