U.S. markets closed
  • S&P 500

    4,356.45
    -53.68 (-1.22%)
     
  • Dow 30

    34,297.73
    -66.77 (-0.19%)
     
  • Nasdaq

    13,539.29
    -315.83 (-2.28%)
     
  • Russell 2000

    2,004.03
    -29.48 (-1.45%)
     
  • Crude Oil

    85.41
    -0.19 (-0.22%)
     
  • Gold

    1,849.90
    -2.60 (-0.14%)
     
  • Silver

    23.94
    +0.04 (+0.18%)
     
  • EUR/USD

    1.1308
    -0.0022 (-0.19%)
     
  • 10-Yr Bond

    1.7830
    +0.0480 (+2.77%)
     
  • GBP/USD

    1.3510
    +0.0020 (+0.15%)
     
  • USD/JPY

    113.8610
    -0.0990 (-0.09%)
     
  • BTC-USD

    36,950.52
    +295.71 (+0.81%)
     
  • CMC Crypto 200

    831.82
    +11.23 (+1.37%)
     
  • FTSE 100

    7,371.46
    +74.31 (+1.02%)
     
  • Nikkei 225

    27,131.34
    -457.03 (-1.66%)
     

Purplebricks Group plc (LON:PURP) Is About To Turn The Corner

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • PRPPF

Purplebricks Group plc (LON:PURP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Purplebricks Group plc engages in the real estate agency business in the United Kingdom. With the latest financial year loss of UK£12m and a trailing-twelve-month loss of UK£5.0m, the UK£325m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Purplebricks Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Purplebricks Group

Consensus from 3 of the British Real Estate analysts is that Purplebricks Group is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of UK£4.6m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 55%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

We're not going to go through company-specific developments for Purplebricks Group given that this is a high-level summary, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Purplebricks Group has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Purplebricks Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Purplebricks Group's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

  1. Valuation: What is Purplebricks 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 Purplebricks 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 Purplebricks 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.