Real Estate Brokerage Disruptor Attracts Bullish Spreads
Fathom (FTHM) interesting action recently in the options market for a very small company with 3000 May $15 puts sold to open to buy 3000 of the $17.5/$30 call spreads and has also seeing 2450 May $20 calls bought. On 12/21 the August $20 puts were sold to open 550X to buy the $20/$30 call spreads. FTHM shares have moved from $55 highs earlier this year to $18 and now back at its largest long-term volume node with $16.70 seen as key support. Fathom is a cloud-based, technology-driven platform-as-a-service company operating in the real estate industry for management of real estate brokerage back-office functions. Agents from traditional model brokerages can increase their income by over 25% on average utilizing the FTHM platform. FTHM derives substantially all of its revenues from serving buyers and sellers of existing homes. FTHM has a $294M market cap and trades 0.9X EV/Sales with revenues rising 39.6% in 2018, 43.9% in 2019, 59% in 2020 and seen rising 80% in 2021. Despite the long history of strong growth it sees 20-30% annual growth the next three years and profitability seen in 2023. Analysts have an average target of $55 with short interest at 13.9% of the float.
FTHM is an interesting own at these levels as growth stocks without profitability have been thrown out but FTHM offers a real value added platform and keeps beating estimates and can be a long-term winner.