Is PurpleBricks valued too high?

April 11, 2016

PurpleBricks a new generation “online estate Agent” made headlines in December last year when they started trading on the London AIM (Alternative Investment Market) at a market capitalisation of £240.3 million.

 
The share price as of today puts a value on the company of around £400million, to put that into perspective Foxtons have a market cap of around £450million, surely that makes PurpleBricks valuation a bit on the top side in anyones book, especially when they are not even making a profit, quite the reverse they are still eating cash with such a high advertsing budget.

 
In a report out from the Motley Fool last week they mention that many investors question whether a correction is now on the cards, furthermore, with the outlook for the UK property market being rather uncertain, the lack of a margin of safety for new investors could lead to sub-optimal investment returns over the medium-to-long term.

Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

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