Shares in online estate agent Purplebricks have continued to fall as pressure builds on the company to publish its sales figures.
The stock has tumbled by 23% since Thursday – when broker Jefferies questioned its claim to have sold 88% of homes listed on its site within 10 months.
Jefferies said the rate was closer to 51%.
Purplebricks charges a flat fee rather than taking a cut of the eventual sale price, meaning the customer must pay the fee regardless of whether the property is sold.
The company, which operates in Australia as well as the UK and is moving into the US, has previously got into trouble with the advertising watchdog for not making it clear that the fee had to be paid either way.
The company’s latest results, published in December, reported that its average revenue per UK customer was £1,138.
Jefferies said using the platform was the equivalent of a “£1,000 coin-toss”, and that the business model had not yet been proved.
On Friday, Purplebricks said it contested the findings of the Jefferies report: “Jefferies estimated Purplebricks’ completion rate is based on a single month’s data and does not include properties that have completed but have yet to be uploaded to the Land Registry, which can take several months.”
It added a trading update for January, saying it had now sold and completed on over £10 billion worth of UK property.
But this then faced further criticism from analysts. “It is never edifying to watch a company go into bunker mode to defend itself against analyst criticism,” said Chris Beauchamp, chief market analyst at IG.
“Purplebricks’ defence of its model after Jefferies sell-note may make the management feel better, but the image that is created does the company no favours. Better to suffer in silence and let the performance speak for itself.”
Jefferies’ research note came after Purplebricks said on BBC Radio that it sells 88% of listed homes within 10 months.
The note, authored by Anthony Codling and Sam Cullen, stated: “Our research sample found that it had sold 51.6% of the homes listed in November 2016 within 10 months, a similar success rate to the overall market, but below the company’s claim of 88%.
“A review of Purplebricks’ accounting policies raises concerns to us that either its contractual obligations to its customers end with their home being listed on the major property portals or that revenue may have been overstated and deferred income provisions understated in its audited accounts.”
Lee Wainwright, Purplebricks UK chief executive, said the analysis does not include properties which have exchanged, have reached sold subject to contract, or are on marketing breaks.
Purplebricks said it reiterated its most recently published sales conversion rate from instruction to sale agreed of 78%, which it said more accurately reflects its sales performance.
The estate agent added that it “publicly refutes” the analysts’ criticism of its revenue recognition and auditing policies.