A week ago, Fathom Holdings Inc. (NASDAQ: FTHM) came out with a solid set of annual numbers that could potentially lead to a stock revaluation. Income and loss per share both exceeded expectations, with income of $ 177 million leading the estimate by 2.6%. Statutory losses were slightly lower than analysts’ expectations, reaching US $ 0.12 per share. Analysts usually update their forecasts with each earnings report, and we can judge from their estimates whether their view of the business has changed or if there are new concerns to consider. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
Based on the latest results, the current consensus of Fathom Holdings’ twin analysts is for 2021 revenue of US $ 223.3 million, which would reflect a significant 26% increase in sales over the past 12 years. month. Losses per share are expected to explode, reaching US $ 0.28 per share. Prior to this earnings announcement, analysts had modeled revenues of $ 223.3 million and losses of $ 0.28 per share in 2021.
As a result, there have been no major changes from the consensus price target of US $ 55.50, implying that the company is trading roughly as expected despite ongoing losses.
Looking at the big picture now, one of the ways we can make sense of these forecasts is to see how they stack up against both past performance and industry growth estimates. It’s pretty clear that Fathom Holdings’ revenue growth is expected to slow significantly, with revenue by the end of 2021 expected to grow 26% on an annualized basis. This is compared to a historic growth rate of 37% over the past three years. Juxtapose that to other industry companies covered by analysts, which are expected to grow their revenues (in total) by 14% per year. Even after the expected slowdown in growth, it seems clear that Fathom Holdings is also expected to grow faster than the industry as a whole.
The bottom line
The most obvious conclusion is that analysts have not changed their forecast for losses next year. Fortunately, there were no major changes to the revenue forecast, with the business still expected to grow faster than the industry as a whole. The consensus price target remained at US $ 55.50 as the latest estimates were not sufficient to impact their price targets.
That said, the company’s long-term earnings trajectory is much bigger than next year. At least one analyst has provided forecasts through 2024, which can be viewed for free on our platform here.
However, you should always think about the risks. Concrete example, we have spotted 1 warning sign for Fathom Holdings you must be aware.
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