Exp World Intrinsic Value – eXp World Holdings Posts Q4 Loss as Real Estate Transaction Volume Falls 16% Year-Over-Year

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Exp World Intrinsic Value – EXP ($NASDAQ:EXPI): e X p W o r l d H o l d i n g s r e p o r t e d a l o s s i n i t s f o u r t h q u a r t e r , a s t h e r i s i n g m o r t g a g e r a t e s c a u s e d a d e c r e a s e i n t h e d e m a n d f o r r e a l e s t a t e . T h i s w a s d e s p i t e t h e c o m p a n y ’ s o n g o i n g e f f o r t s t o i m p r o v e i t s r e a l e s t a t e m a n a g e m e n t a n d t e c h n o l o g y p l a t f o r m s , p r o m o t e i t s v i r t u a l d e l i v e r y m o d e l , a n d c r e a t e a m o r e d i v e r s e p r o d u c t p o r t f o l i o . T h e i n c r e a s e i n m o r t g a g e r a t e s l e d t o f e w e r t r a n s a c t i o n s , e s p e c i a l l y a t h i g h e r p r i c e s , w h i c h d i r e c t l y a f f e c t e d e X p W o r l d H o l d i n g s ’ p e r f o r m a n c e i n t h e q u a r t e r . A d d i t i o n a l l y , t h e c o m p a n y ’ s o t h e r s e g m e n t s , i n c l u d i n g b r o k e r a g e , i n s u r a n c e , m a r k e t i n g , a n d t e c h n o l o g y s o l u t i o n s a l l s a w d e c r e a s e s i n r e v e n u e c o m p a r e d t o t h e s a m e p e r i o d o f t h e p r e v i o u s y e a r .

D e s p i t e t h e l o s s e s p o s t e d i n Q 4 , e X p W o r l d H o l d i n g s r e m a i n s o p t i m i s t i c a b o u t i t s p r o s p e c t s , s t a t i n g t h a t i t i s w e l l p o s i t i o n e d f o r a r e c o v e r y o n c e m a r k e t c o n d i t i o n s i m p r o v e . T h e y h a v e c o n t i n u e d t o f o c u s o n d e v e l o p i n g t h e i r r e a l e s t a t e m a n a g e m e n t a n d t e c h n o l o g y p l a t f o r m s , e n a b l i n g t h e m t o b e w e l l – e q u i p p e d f o r f u t u r e g r o w t h o p p o r t u n i t i e s . F u r t h e r m o r e , t h e i r v i r t u a l d e l i v e r y m o d e l o f f e r s a n e f f i c i e n t a n d c o s t – e f f e c t i v e w a y f o r c l i e n t s t o p u r c h a s e , s e l l , o r r e n t p r o p e r t i e s f r o m a n y w h e r e i n t h e w o r l d.

Share Price

On Tuesday, eXp World Holdings (EXP WORLD) reported a Q4 loss due to a 16% year-over-year drop in real estate transaction volume. At the time of writing, media sentiment surrounding the news was mostly neutral. In response to the news, EXP WORLD stock opened at $12.6 on Tuesday, and closed at $12.1, down by 4.1% from its prior closing price of $12.6. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Exp World. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Exp World. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Exp World. More…

Key Ratios Snapshot

Some of the financial key ratios for Exp World are shown below. More…

Analysis – Exp World Intrinsic Value

At GoodWhale, we recently analyzed the financials of EXP WORLD, and according to our proprietary Valuation Line, we believe that the intrinsic value of EXP WORLD share is around $38.3. Unfortunately, the market seems to disagree, and at the moment EXP WORLD stock is only trading at $12.1. This means that right now, the stock is undervalued by 68.4%. It’s a great opportunity for investors looking to purchase discounted assets. More…

Peers

The company operates through its wholly owned subsidiary, eXp Realty, LLC. eXp Realty is a national real estate brokerage company with over 30,000 real estate agents in the United States, Canada, and the United Kingdom. The company offers a suite of cloud-based real estate services, including brokerage, transaction management, lead generation, and marketing. eXp World Holdings Inc. competes with Redfin Corp, Opendoor Technologies Inc, and Realogy Holdings Corp in the online real estate brokerage market. These companies offer similar services as eXp World Holdings Inc, but differ in their business models and geographic focus.

– Redfin Corp ($NASDAQ:RDFN)

Redfin is a technology-powered real estate brokerage, founded in 2004 and headquartered in Seattle, WA. They offer a full-service platform for buying and selling homes, as well as a suite of tools and services for homebuyers and sellers. Redfin has a market cap of $516.24M as of 2022 and a return on equity of -50.48%. The company has been growing rapidly, with revenue increasing from $267M in 2016 to $1.1B in 2020. However, Redfin has not been profitable on an GAAP basis, with net losses of $141M in 2020. The company is investing heavily in expansion and technology, which has led to negative cash flow from operations in recent years.

– Opendoor Technologies Inc ($NASDAQ:OPEN)

Opendoor Technologies Inc is a real estate company that allows users to buy and sell homes through its online platform. The company has a market cap of 1.53B as of 2022 and a return on equity of 0.03%. Opendoor was founded in 2014 and is headquartered in San Francisco, CA.

Summary

A t t h e t i m e o f w r i t i n g , t h e m e d i a s e n t i m e n t t o w a r d s t h e c o m p a n y w a s m o s t l y n e u t r a l . O n t h e s a m e d a y , t h e i r s t o c k p r i c e d i p p e d s l i g h t l y a s i n v e s t o r s r e a c t e d t o t h e n e w s o f t h e l o w e r t r a n s a c t i o n v o l u m e . O v e r a l l , t h i s i s n o t a p a r t i c u l a r l y p o s i t i v e r e p o r t f o r E X P I a n d i n v e s t o r s s h o u l d c o n s i d e r t a k i n g a m o r e c a u t i o u s s t a n c e w h e n i t c o m e s t o i n v e s t i n g i n t h i s c o m p a n y . N e v e r t h e l e s s , t h e l o n g – t e r m p r o s p e c t s f o r t h e f i r m l a r g e l y d e p e n d s o n i t s a b i l i t y t o t u r n a r o u n d i t s p e r f o r m a n c e a n d r e g a i n i n v e s t o r c o n f i d e n c e.