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Foxtons Group plc (LON:FOXT) About To Shift From Loss To Profit

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·3-min read
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With the business potentially at an important milestone, we thought we'd take a closer look at Foxtons Group plc's (LON:FOXT) future prospects. Foxtons Group plc, an estate agency, provides services to the residential property market in the United Kingdom. The UK£109m market-cap company posted a loss in its most recent financial year of UK£3.2m and a latest trailing-twelve-month loss of UK£1.6m shrinking the gap between loss and breakeven. The most pressing concern for investors is Foxtons Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Foxtons Group

Consensus from 3 of the British Real Estate analysts is that Foxtons Group is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of UK£6.0m in 2022. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 81% is expected, which signals high confidence from analysts. 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

Given this is a high-level overview, we won’t go into details of Foxtons Group's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Foxtons Group has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

  1. Valuation: What is Foxtons 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 Foxtons 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 Foxtons 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.

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

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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