CARY, N.C. - Fathom Holdings Inc. (NASDAQ:FTHM), a national real estate services platform, has sold its insurance subsidiary, Dagley Insurance, back to its founder Nathan Dagley for $15 million. The transaction includes an $8 million upfront payment and $7 million to be paid over the next two years.
This strategic move is designed to strengthen Fathom's financial position and support its growth initiatives. Despite the divestiture, Dagley Insurance will maintain its close relationship with Fathom Realty, continuing to provide services to its agents across 47 states.
Marco Fregenal, CEO of Fathom Holdings, remarked on the sale, emphasizing the company's continued partnership with Dagley Insurance and the expected benefits for Fathom's balance sheet and growth strategy. He expressed confidence that this infusion of capital will help the company navigate potential market challenges and create value for shareholders.
Nathan Dagley expressed his gratitude for the support received during his tenure at Fathom and is excited to maintain the partnership with Fathom Realty, Encompass Lending, and Verus Title. He praised his team's resilience and looks forward to delivering quality insurance solutions.
Fathom Holdings Inc. operates a technology-driven real estate services platform offering residential brokerage, mortgage, title, insurance, and SaaS solutions. Their portfolio includes Fathom Realty, Encompass Lending, intelliAgent, LiveBy, Real Results, and Verus Title.
The press release also contains forward-looking statements, cautioning that actual results could vary due to market conditions, the potential loss of insurance revenue from the transaction, and other risks as detailed in the company's SEC filings.
The divestiture aligns with Fathom's strategy to focus on its core operations while retaining a collaborative relationship with Dagley Insurance to support its real estate network. This information is based on a press release statement from Fathom Holdings Inc.
InvestingPro Insights
As Fathom Holdings Inc. (NASDAQ:FTHM) navigates its strategic divestiture of Dagley Insurance, the latest data from InvestingPro provides a deeper look into the company's financial health and market performance.
With a market capitalization of just $31.58 million, Fathom Holdings is positioned as a smaller player within the national real estate services industry. The company's revenue for the last twelve months as of Q4 2023 stands at $345.23 million, reflecting a decline of 16.4% from the previous year, indicating potential challenges in revenue generation.
InvestingPro Tips highlight that Fathom Holdings is expected to see net income growth this year, which could signal a positive turn for the company's profitability. However, the company is also quickly burning through cash, which is a critical factor for investors to consider, especially when evaluating the company's capability to fund its growth initiatives and navigate market uncertainties.
Furthermore, with a negative adjusted P/E ratio of -1.35 for the same period, Fathom's valuation reflects investor concerns about its earnings potential. The company's stock price has experienced significant volatility, with a 1-month price total return of -20.71% and a 3-month price total return of -41.42%, underscoring the high-risk nature of the investment.
For those interested in a more comprehensive analysis, there are additional InvestingPro Tips available, providing a deeper dive into Fathom's financials, stock performance, and market outlook. Access these insights at InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enriching your investment strategy with valuable, real-time data and expert analysis.
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