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Fathom Holdings (FTHM)
NASDAQ:FTHM
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Fathom Holdings
(NASDAQ:FTHM)
Rating:56Neutral
Price Target:
$1.50
▲(17.19%Upside)
Positive Factors
Agent Growth Potential
Acquisition of MyHomeGroup added ~2.2K highly productive agents, enhancing the potential for future growth.
Ancillary Services
Ancillaries grew ~42% year-over-year on 9% fewer transactions, indicating that investments in those services are proving beneficial.
Negative Factors
Financial Performance
3Q results fell short of expectations with continued housing pressure and marginally slower agent growth.
Transaction Decline
Transactions fell 9.4% year-over-year, with faster declines than the industry, impacting overall performance.
Fathom Holdings (FTHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$35.55M
Dividend YieldN/A
Average Volume (3M)56.13K
Price to Earnings (P/E)―
Beta (1Y)1.39
Revenue Growth5.80%
EPS Growth30.19%
CountryUS
Employees270
SectorReal Estate
Sector Strength63
IndustryReal Estate - Services
Share Statistics
EPS (TTM)-0.18
Shares Outstanding27,776,484
10 Day Avg. Volume62,909
30 Day Avg. Volume56,126
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.44
Price to Sales (P/S)0.00
P/FCF Ratio-2.22
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.50Price Target Upside17.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Fathom Holdings Business Overview & Revenue Model
Company DescriptionFathom Holdings (FTHM) is a technology-driven real estate brokerage company that operates primarily in the United States. The company focuses on providing real estate services through its proprietary cloud-based platform, which enhances the efficiency and productivity of real estate agents. Fathom Holdings offers a range of services including residential real estate sales, brokerage services, and support for real estate agents through innovative technology solutions.
How the Company Makes MoneyFathom Holdings generates revenue primarily through real estate transaction fees. The company employs a commission-based model where it earns income by taking a percentage of the commission from real estate transactions completed by its agents. In addition, Fathom Holdings charges its agents a flat fee per transaction, which contributes to its revenue streams. The company also benefits from its technology platform, which allows for scalable operations with reduced overhead costs, thus enhancing profitability. Its earnings are further supported by strategic partnerships and expansion into new markets, enabling access to a larger client base and increased transaction volume.
Fathom Holdings Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: 33.33%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, successful cost-cutting, and expansion in both agent count and ancillary businesses. However, consistent net losses and challenges in the technology segment and market conditions temper the positive outlook. The launch of the Elevate program presents potential for future profitability.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue rose 32.1% to $93.1 million, compared to $70.5 million the same period last year, exceeding analysts' expectations by roughly 12%.
Brokerage Revenue Increase
Brokers' revenue climbed nearly 36% to $88.9 million, up from $65.4 million last year.
Agent Count Growth
The company entered the quarter with approximately 14,715 licensed agents, a 22.8% increase over Q1 of 2024.
Launch of Elevate Program
The Elevate program was launched, with over 120 agents signing up in the first four weeks. The program is expected to significantly increase gross profit per transaction and EBITDA per transaction.
Cost-Cutting Success
The company reduced expenses by approximately $750,000 per quarter going forward, contributing to a reduction in GAAP net loss.
Growth in Ancillary Businesses
Title revenue increased 43% to $1 million, and mortgage revenue increased 13% to $2.6 million for the first quarter of 2025.
Negative Updates
Consistent Net Loss
GAAP net loss for the first quarter of 2025 was $5.6 million, slightly less than the $5.9 million loss in the first quarter of 2024.
Technology Segment Revenue Decline
Third-party revenues in the technology segment decreased to $600,000 in Q1 2025 compared to $800,000 in Q1 2024.
Market Challenges
Elevated mortgage rates and shifting market conditions continue to pose challenges, with housing prices experiencing modest declines in some regions.
Company Guidance
During the first quarter of 2025, Fathom Holdings reported a strong performance, with revenue rising 32.1% to $93.1 million compared to $70.5 million in the same period last year, surpassing analyst expectations by approximately 12%. The brokerage division experienced a 36% increase in revenue, totaling $88.9 million, fueled by a 26% rise in real estate transactions to approximately 9,715 closings. Gross profit improved to $8.1 million, a 13% year-over-year increase, with a 34% growth excluding the impact of divesting Dagley Insurance. The company had an agent count increase of 22.8% to 14,715. Fathom's cost-cutting initiatives reduced expenses by approximately $750,000 per quarter, positioning the company to achieve adjusted EBITDA profitability in the second quarter. The newly launched Elevate program has already attracted over 120 agents, with plans to onboard around 100 new agents per month by Q4, aiming to boost gross profit per transaction and EBITDA.Fathom Holdings Financial Statement Overview
Summary
Fathom Holdings shows potential with improved gross profit margins, but persistent losses and negative cash flows indicate ongoing financial challenges. The balance sheet reflects moderate leverage and a stable asset base, but declining equity is a concern. The company needs to focus on improving profitability and cash flow generation to enhance financial stability.Income Statement
Fathom Holdings has struggled to achieve consistent revenue growth, with a notable decline in revenue year-over-year. The gross profit margin has improved significantly, indicating better cost control. However, the company remains unprofitable with negative net and EBIT margins, reflecting challenges in achieving operational efficiency.45
Neutral
Balance Sheet
The company's balance sheet shows a moderate debt-to-equity ratio, indicating manageable leverage. However, the decline in stockholders' equity and total assets over the years is concerning. The equity ratio remains healthy, suggesting a stable asset base relative to equity.60
Neutral
Cash Flow
Fathom Holdings faces challenges with negative operating and free cash flows, reflecting ongoing difficulties in generating cash from operations. The free cash flow to net income ratio is negative, highlighting cash flow constraints. However, there has been an improvement in operating cash flow relative to net income, suggesting slight operational enhancements.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 317.51M | 335.18M | 345.23M | 412.96M | 330.23M | 176.78M | Gross Profit |
| 98.54M | 335.18M | 37.13M | 40.72M | 29.72M | 10.42M | EBIT |
| -25.14M | -23.46M | -23.25M | -26.78M | -16.11M | -1.28M | EBITDA |
| -18.45M | -19.82M | -17.31M | -21.43M | -13.36M | -1.12M | Net Income Common Stockholders |
| -23.78M | -21.58M | -23.98M | -27.63M | -12.49M | -1.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 154.44K | 7.13M | 7.40M | 8.32M | 37.83M | 28.58M | Total Assets |
| 0.00 | 75.40M | 79.26M | 80.19M | 104.93M | 35.22M | Total Debt |
| 0.00 | 9.15M | 17.57M | 11.12M | 14.99M | 980.80K | Net Debt |
| 154.44K | 2.02M | 10.17M | 2.80M | -22.84M | -27.60M | Total Liabilities |
| 0.00 | 30.72M | 24.02M | 18.17M | 24.78M | 5.57M | Stockholders Equity |
| 1.72K | 44.68M | 55.23M | 62.02M | 80.15M | 29.65M |
| Cash Flow | Free Cash Flow | ||||
| -9.26M | -5.20M | -12.40M | -10.64M | -15.18M | -1.96M | Operating Cash Flow |
| -8.74M | -5.15M | -10.57M | -6.58M | -11.70M | -1.21M | Investing Cash Flow |
| 4.59M | 3.76M | -1.87M | -7.10M | -14.56M | -909.75K | Financing Cash Flow |
| 10.81M | 1.24M | 11.60M | -15.86M | 34.62M | 31.11M |
Fathom Holdings Technical Analysis
Positive
1.28
Price Trends
0.93
Positive
1.03
Positive
1.67
Negative
Market Momentum
0.10
Negative
62.80
Neutral
52.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTHM, the sentiment is Positive. The current price of 1.28 is above the 20-day moving average (MA) of 1.12, above the 50-day MA of 0.93, and below the 200-day MA of 1.67, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 62.80 is Neutral, neither overbought nor oversold. The STOCH value of 52.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FTHM.
Fathom Holdings Risk Analysis
Fathom Holdings disclosed 44 risk factors in its most recent earnings report. Fathom Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Q2, 2024
Fathom Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $909.34M | ― | -52.95% | ― | 83.50% | 8.45% | |
67 Neutral | $1.37B | ― | -6.44% | 2.29% | 6.69% | -137.52% | |
65 Neutral | $235.16M | ― | -23.11% | ― | 11.24% | 38.70% | |
61 Neutral | $2.82B | 10.89 | 0.42% | 8438.96% | 5.74% | -20.95% | |
56 Neutral | $35.55M | ― | -44.60% | ― | 5.80% | 30.19% | |
50 Neutral | $1.29B | ― | 199.35% | ― | 5.11% | -29.67% | |
46 Neutral | $430.56M | ― | -47.67% | ― | 2.36% | -23.60% |
* Real Estate Sector Average
Performance Comparison
FTHM
Fathom Holdings
1.27
-0.59
-31.72%
EXPI
eXp World Holdings
8.71
-2.12
-19.58%
RDFN
Redfin
9.98
3.18
46.76%
OPEN
Opendoor Technologies
0.66
-1.62
-71.05%
REAX
Real Brokerage
4.12
-0.42
-9.25%
DOUG
Douglas Elliman Inc.
2.68
1.58
143.64%
Fathom Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Fathom Holdings Expands Board, Appoints New Director
Positive
Mar 17, 2025
On March 17, 2025, Fathom Holdings Inc. announced the expansion of its board of directors from six to seven members and appointed Adam Rothstein as the new non-employee director. Rothstein, a venture investor with extensive experience in technology, media, and medical technology, will serve on several committees, including the newly formed Strategy and Innovation Committee. His appointment is expected to enhance Fathom’s strategic vision and drive long-term growth, benefiting agents, clients, and shareholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.