Roth Capital Markets analyst Darren Aftahi stated in an Oct. 13 earnings preview that Fathom Holdings (Fathom Holdings Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:FTHM) is positioned to learn from its latest capital increase, which he stated ought to speed up the corporate’s Elevate agent onboarding program and drive gross-margin enlargement by means of 2025 and into 2026.
Aftahi maintained his “Purchase” ranking and raised his 12-month goal worth to US$2.50 from US$2.00, implying roughly 2× FY26 gross revenue of US$43.2-million and margin approaching double digits by the tip of 2026.
Fathom is a cloud-based, full-service actual property brokerage that operates on an all-virtual platform, charging brokers a set charge per transaction. The corporate earns fee earnings from helping shoppers in shopping for, promoting, or leasing properties, with brokers remitting a small fastened portion of every transaction to Fathom. It’s headquartered in Cary, North Carolina.
Aftahi stated the brand new funding “may assist bolster Fathom’s ambitions to increase its Elevate program, which generates three to 4 occasions increased gross revenue per transaction, by including incremental options that improve its worth.”
He stated this method permits Fathom to “raise gross margins with out counting on broad agent enlargement,” as a substitute emphasizing the recruitment of higher-quality brokers inside its current base and thru focused acquisitions.
“As this system expands,” Aftahi stated. “Fathom may face twin tailwinds for margins if the housing market improves — increasing gross margins from Elevate whereas bettering connect charges on ancillary providers.”
For Q3 2025, Aftahi fashions roughly 15,300 brokers, up 24% 12 months over 12 months, finishing about 11,300 transactions, or roughly 0.75 per agent. Ought to market circumstances stay secure, he stated transaction quantity may attain 13,000, implying upside to his mannequin. He forecasts income of US$102.1-million (up 22% 12 months over 12 months), together with US$5.8-million in ancillary income (up 12% 12 months over 12 months), and gross revenue of US$8.1-million, representing a 7.9% margin. That determine is 80 foundation factors decrease 12 months over 12 months on account of increased capping and transaction combine skewing towards extra productive brokers.
Aftahi expects an Adjusted EBITDA lack of US$2.3-million within the quarter however sees working bills trending decrease sequentially. He stated the corporate’s capital increase positions it to pursue extra aggressive agent recruitment and increase onboarding capability towards its preliminary 100-agent-per-month goal.
Aftahi stated Fathom ought to put up an Adjusted EBITDA lack of US$6.7-million on US$411.5-million in income in fiscal 2025, bettering to Adjusted EBITDA of US$3.3-million on US$478.1-million in fiscal 2026.
“We count on 2026 to be a formative 12 months for Fathom below its new gross-margin mannequin,” he stated, because the Elevate program matures and ancillary income positive aspects momentum.
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