The management of eXp World Holdings Inc (OTCMKTS:EXPI) must be having its best days.
This is courtesy of the share price surge that has been seen recently, one which has seen the company’s share price rise from just shy of $3 back in October to their current price of $16.95, an over 465% surge in just under four months.
The activity in the shares traded has also increased over the same period with the average number of shares traded rising from well under 50,000 before October to over 300,000 as of January 2018.
The above can all be seen in the graph below:
This alludes to the fact that the market, as well as the company’s shareholders, have decided to invest in a value proposition that the company is selling to them. As such, we decided to take a look at their value proposition and ascertain whether or not the market is right at offering such a high valuation to EXPI.
Background to EXPI
Before the, however, let us have a look at the history of EXPI.
Founded back in July 2018 by Glenn Darrel Sanford, the company acts as the holding company for eXp Realty.
The company has since established itself within the real estate sector with their role being inclined towards marketing and sale of residential real estate properties. The company currently has the first cloud-based and agent-owned real estate brokerage system that is fully operational and accepted nationwide. They are now operating within over 40 states in the US – with their headquarters Bellingham, Washington – and have also ventured into Canada.
EXPI is one of the fastest growing real estate brokerage firms in North America. They currently boast a market capitalization of $924 million with the goal of hitting $ 1 billion seeming ever-so near as the days go by. EXPI has over 50 employees and keeps growing by the day.
Developments Affecting EXPI
Our last review of the company – accessible here – dubbed the company a hub for real estate agents, and rightfully so.
Days later, a release from the company showed continued investment in the eXp World space. Through the release, the company announced new tools that would ensure agents can work efficiently and optimally from any place around the globe. These tools would ensure that agents perform better, can work from anywhere and have access to powerful solutions that will enable them to improve performance. Such tools include eXp enterprise that would manage both the processes and information of any company, also allowing for the real-time usage of data from the information above.
From this, the company believes it is taking strides in the right direction and expect that over time, this will be the go-to platform for agents within the USA.
These words have been seconded by the company’s Chief Technology Officer, Scott Petronis who said:
“eXp Realty believes in constant innovation to provide the best technology tools and services for agents to help them manage and grow their business… We built eXp Enterprise with the entrepreneurial agent in mind. Agents can access their data when they want and how they want.”
While on the same topic, the company went ahead to top its prior highs in the number of agents to close December with over 6,000 agents from across North America registered within their system. This was an over 20% jump from the under 5,000 agents it had recorded back in the third quarter of 2016, a significant feat for the company. The projected figures for 2018 stand at 6,500 and management stood confident that they would surpass this number by the end of the month.
Such exponential growth in their market base, the company’s future outlook can only be described as robust. This, according to their CEO is pegged to their value proposition as well as the unique set of agents they currently have in their system.
Mr. Glenn Sanford went further to add:
“After more than doubling our agent count last year, it is clear our value proposition of offering every agent the unique opportunity to become a shareholder in their own company is resonating with top agents and teams.”
With such a value proposition and such growth, the company’s financials are expected to be stronger than ever, and they were.
Their revenues have been growing by over 22% from quarter-to-quarter with the figure standing at $48.1 million in 3Q2017, up from $39.6 million in 2Q2017. Furthermore, this was a 203% increase from the $15.6 million made in the third quarter of 2016. This was accompanied by a 96% year-on-year increase in the gross profit margin as well as a 255% increase in operating cash flows which saw the company close the period with $4.8 million and $3.3 million respectively.
Despite this, the company still made a loss of $7.8 million – which was a reduction from the $14.6 million made in 3Q2016.
As such, the company’s chief aim currently is to ensure they are profitable. This is less of an uphill task for them as their capital investments are presently paying off. As such, we expect that EXPI will soon be profitable and once this is achieved, nothing will stop its rise to the top.
EXPI is on the rise. Their investments are currently paying off as proven by their financial position. Given this trend, the future looks bright for them and nothing will stop their rise to the top.
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Disclosure: We have no position in EXPI and have not been compensated for this article.
Image courtesy of Sherwood CC via Flickr