Independent research group Fundamental Research Corp. announced that it has updated its analysis of eXp World holdings, Inc. (OTCQB: EXPI) with an increased fair value estimate and revenue forecast after the company’s record financial results in the third quarter of 2016. The research firm began coverage of eXp World Holdings in April and has already updated its projections once in August amid the group’s unprecedented high growth driven by its real estate brokerage division, eXp Realty.
eXp Realty has remained the driving force behind the group’s increase throughout the last few months, as it is currently one of the fastest growing real estate brokerages on the U.S. market, having nearly tripled in size and operations since inception. The Agent-Owned Cloud Brokerage™ currently has more than 2,200 real estate professionals serving 41 states, the District of Columbia, and Alberta, Canada. eXp Realty had only 864 agents on January 1 of this year and 1,580 in August, when the previous Fundamental Research Corp. report was released.
In its latest report (http://dtn.fm/7AopD), released on Monday, Fundamental Research Corp. raised its year-end agent forecast to 2,400, up 300 from its previous estimate of 2,100. The research group also raised its average agent count for 2017 while maintaining its year-end estimate at 4,500 agents. The long-term agent count forecast was also raised from 15,000 to 25,000 by 2022. According to the report, EXPI’s ability to attract successful real estate professionals at such an impressive rate is vital and will enable the company to continue its rapid growth of its agent base.
The revenue forecast for 2016 was also raised to $53.46 million from $48.94 million. For 2017, the research group estimates a higher revenue of $101.43 million, compared to the previous estimate of $82.50 million. Noting that EXPI’s revenues in Q3 increased by 112% year-over-year to $15.77 million, and that total revenues for the first nine months of 2016 were $36.18 million, 120% higher than the same reporting period last year, Fundamental Research Corp reiterated its ‘Buy’ rating for the company, with a raised fair value estimate of $6.78 per share compared to the current $4.06 per share.
The research group also reiterated its risk rating of 4 for the company, outlining the following potential risks: the high competitive nature of the real estate brokerage industry, the company’s overall profitability being very dependent on the health and state of the real estate market, the fact that the company is still in a growth stage with a rather short track record and has yet to prove its ability to retain agents long-term, and the company being susceptible to negative regulatory law changes, as any other real estate brokerage on the market.
The company’s exponential growth rate is the direct result of eXp Realty’s unique business model that relies heavily on cloud-based technologies and advanced virtual reality platforms to build a strong online community of real estate professionals. Without the limitations of a brick and mortar office and related expenses, members can provide efficient customer service and increase their profits with a lower risk. The company also offers all agents the possibility of being owners by giving them access to revenue sharing programs and the opportunity to become shareholders based on their contribution to company growth.
For more information, visit the company’s website at www.eXpWorldHoldings.com
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