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1/ 
Fathom Holdings - $FTHM
$FTHM wants to hire and serve the very best real estate agents while offering industry best commissions
74% rev growth
56% increase in real estate
transactions
Average revenue per transaction up 12%
Agent count up 38% to over 5,000
Fathom Holdings - $FTHM $FTHM wants to hire and serve the very best real estate agents while offering industry best commissions
74% rev growth
56% increase in real estate
transactions Average revenue per transaction up 12%
Agent count up 38% to over 5,000
2/ Fathom Holdings $FTHM is a real estate company that's disrupting the real estate agent market via an innovative platform as a service (PAAS) model which is powered by their proprietary cloud 
based technology called intelliagent. https://www.fathomcareers.com/technology/
based technology called intelliagent. https://www.fathomcareers.com/technology/
3/ This allows $FTHM to streamline and automate 
back office operations and reduce personnel requirements. Their agents are able to operate virtually 
without the need for an office and the fees 
associated
back office operations and reduce personnel requirements. Their agents are able to operate virtually without the need for an office and the fees associated
4/ Because of this agents tend to be more productive
by reducing the time it takes to manage the transaction process and get in front of more buyers and sellers
by reducing the time it takes to manage the transaction process and get in front of more buyers and sellers
5/ Their agents get 
% of their commission minus a flat fee and earn 35% more on average.
This helps bring new agents in which is driving new sales which leads to more growth
% of their commission minus a flat fee and earn 35% more on average. This helps bring new agents in which is driving new sales which leads to more growth
6/ On the 
you can see an example of an agent’s potential earnings on a $350k house with $FTHM.
On the
we see a yearly breakout with 12 $200k sold from their current broker vs $FTHM. This agent would earn $19k more per year with $FTHM.
you can see an example of an agent’s potential earnings on a $350k house with $FTHM. On the
we see a yearly breakout with 12 $200k sold from their current broker vs $FTHM. This agent would earn $19k more per year with $FTHM.
7/ Importantly the breakeven from each additional new agent they add is only $920 which they generate on just their first sale 
and this number is expected to drop
in the long run. Currently, the lifetime value of an agent is $18,000
and this number is expected to drop in the long run. Currently, the lifetime value of an agent is $18,000
8/ Agents success 
is a big part of $FTHM s success
“Agents join to earn more commission but they stay for the culture” - CEO Josh Harley
Attrition is 1/2 the industry standard
4th year in a row top place to
4.9/5
on Glassdoor! Incredible 
Reminds me of $DOCU.
is a big part of $FTHM s success“Agents join to earn more commission but they stay for the culture” - CEO Josh Harley
Attrition is 1/2 the industry standard
4th year in a row top place to
4.9/5
on Glassdoor! Incredible Reminds me of $DOCU.
9/ They were only public for 1/2 of the last quarter so they didn’t get a full benefit of the capital raised in the IPO. Entrance into new markets (like recently Michigan) and acquisitions (like Verus Title) are expected to continue with their IPO funding
10/ They acquired Verus Titles for about $1.7 million which is a technology-driven and virtual titling service as a bolt-on. Most agents don’t have a financial relationship with a titling company. This allows $FTHM to add easy incremental revenue when their agents use Verus
11/ Today’s standard practice is to add the title company on the MLS for whichever one is closest to the closing of the house 
. Being virtual $FTHM can make the transaction even easier
. Being virtual $FTHM can make the transaction even easier
12/ 5k closings per year could add about $2 million of EBIT. If closing transactions go to 10k per year it would add about $4 million of EBIT. And with 25k transactions $FTHM could see an excess of $12.5 million of EBIT
Conservatively 5k agents x 5 closings = 25k or 12.5 MM
Conservatively 5k agents x 5 closings = 25k or 12.5 MM
13/ They are continuing to leverage their high-efficiency model to maintain sustained future growth through opportunities such as:
Adding ancillary services (mortgage, insurance, lead sales)
Enhancing their technology platform
Finding ways to increase agent productivity
Adding ancillary services (mortgage, insurance, lead sales)Enhancing their technology platform Finding ways to increase agent productivity
14/ $FTHM is in 27 states. Because of their technology-driven model, it is a very low cost to enter a new market 
compared to competitors.
compared to competitors.
15/ $FTHM management
Joshua Harley - Founder and been with Fathom for over 11 years.
HUGE inside ownership Owns 36.3%
Grady Ligon - recently hired as CIO from Berkshire Hathaway Home Services
Joshua Harley - Founder and been with Fathom for over 11 years.
HUGE inside ownership Owns 36.3% Grady Ligon - recently hired as CIO from Berkshire Hathaway Home Services
16/ Financial Check
Total revenue
- $123.4 MM which is up 58% compared to 2019
Est. Rev growth of 29%
Cash of $31.0 MM up from 579k in 2019 (mostly from IPO)
Gross Margins are 5-6% compared to competitors around 8-10%
Operating expenses up from 1.98 MM to 3.11 MM
Total revenue
- $123.4 MM which is up 58% compared to 2019Est. Rev growth of 29%
Cash
of $31.0 MM up from 579k in 2019 (mostly from IPO)Gross Margins are 5-6% compared to competitors around 8-10%
Operating expenses up from 1.98 MM to 3.11 MM
17/ Risks
Small Cap company (~ 500 MM market cap) with low volume
Margins currently lower than competition
Operating at a net loss and will need sustained growth for a path to profitability
P/S has jumped over 3 from ~1.5 recently. Next earnings on 2/10/21.
Small Cap company (~ 500 MM market cap) with low volume Margins currently lower than competition Operating at a net loss and will need sustained growth for a path to profitability P/S has jumped over 3 from ~1.5 recently. Next earnings on 2/10/21.
18/ Overall I think there is a huge opportunity for growth and future success. I think the estimates might be too conservative given the easy scalability, low attrition rates, and housing tailwinds. I am long $FTHM and it is quickly becoming a top holding 
19/ Let me know what you think below!
I originally bought for $16 on 9/9/20 but I don’t see $FTHM talked about often so wanted to make a
*This is not intended to be a recommendation to buy, sell, or hold. I encourage everyone to do your own research and due diligence*
I originally bought for $16 on 9/9/20 but I don’t see $FTHM talked about often so wanted to make a
*This is not intended to be a recommendation to buy, sell, or hold. I encourage everyone to do your own research and due diligence*
