Yet another bank has a bleak forecast for Purplebricks—this time, saying its concerns are over the estate agency's long-term viability of its global endeavors, specifically.
As recently as mid-March the Swiss bank UBS cut its price forecast for Purplebricks’ shares from 305p to 285p but now that lower figure has been slashed to just 100p – the share price at which the hybrid agency launched on the stock market in late 2015.
UBS’s latest worries, expressed in a note to its investor clients, center on Purplebricks’ position in Australia and America; the bank forecasts that the agency won’t break even down under until 2022 and suggests that the US operation will not see a profit until 2025.
“Operations in Australia and the US are characterized by having very limited visibility on the businesses’ development and break-even horizon – Australia keeps being postponed and losses in the US are expected to worsen," explained UBS.
It also suggests that Purplebricks may have been the author of its own downfall by changing its business model in Australia from the typical online ‘upfront’ payment to a more traditional-style pay-on-completion option.
“[This has] raised concerns about the future of online agents and the upfront fee model” says UBS.
This is the second investment bank slap-in-the-face for Purplebricks in recent weeks.
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