Purplebricks falls back to earth – we did warn you
The latest trading update from hybrid online estate agency, Purplebricks (PURP), which brought news of struggles in the United States and the departure of senior management, has seen its share price take a dramatic hit, falling back to near its IPO price. Could current levels offer a buying opportunity?
Purplebricks listed on AIM in December 2015 at a price 93p and by July 2017 hit a high of 527p. Our earlier blog questioned the sanity of its stratospheric valuation and why investors had such confidence in its ability to disrupt such a huge, well-established market. A company moving at that pace was always going to be hit hard as soon as there was any sign of trouble. That trouble has now reared its head in the form of a fragile housing market, which means management now expect revenues to be 12% behind previous expectations. Still, UK revenues are forecast to grow…