Purplebricks’ growth is stalling and it’s being caught up by rival YOPA, say analysts at Swiss banking giant UBS
It has released a research note that both highlights Purplebricks’ slowing growth and cuts the likely final market share in the UK from 15% to 12%.
UBS has subsequently dropped its target price for Purplebricks from £3.05p to £2.85p. Shares in Purplebricks are currently trading at approximately £3.36p each. The bank has also reiterated its advice that investors should sell their shares in the company.
As well as flagging up slowing growth for the hybrid agency, the bank says its Subject to Contact market share has been flatlining since September last year at approximately 5%.
“Given the importance of the Spring Market, we believe that this level of progress will be below management’s expectations, and will raise questions around the potential market share Purplebricks is able to achieve,” it says.
UBS also says that one of its key competitors, Savills-backed YOPA, is beginning to catch up Purplebricks and now has 0.5% of the market, and that many hybrid and online agents are now offering ‘no sale, no fee’ options to customers, something Purplebricks does not.
“Whilst [YOPA’s market share] is still small relative to Purplebricks, YOPA’s strong funding position to support further advertising campaigns means this brand represents a threat,” says UBS.
None of this would seem to bothering many people at the Purplebricks HQ. As we reported earlier this week, new UK CEO Lee Wainright has been given golden handcuffs worth over £400,000 while a group of the company’s employees recently cashed-in shares worth over £4 million.