Dolphin Entertainment, Inc. (NASDAQ:DLPN) Just Reported Earnings, And Analysts Cut Their Target Price
Shareholders might have noticed that Dolphin Entertainment, Inc. (NASDAQ:DLPN) filed its quarterly result this time last week. The early response was not positive, with shares down 3.2% to US$2.13 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$9.9m, statutory losses exploded to US$0.23 per share. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Dolphin Entertainment
After the latest results, the solitary analyst covering Dolphin Entertainment are now predicting revenues of US$49.3m in 2023. If met, this would reflect a solid 20% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 90% to US$0.05 per share. Before this earnings report, the analyst had been forecasting revenues of US$49.0m and earnings per share (EPS) of US$0.02 in 2023. So despite reconfirming their revenue estimates, the analyst is now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 30% to US$7.00, with the analyst signalling that growing losses would be a definite concern.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Dolphin Entertainment's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Dolphin Entertainment is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analyst is expecting Dolphin Entertainment to become unprofitable next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Dolphin Entertainment (including 2 which are a bit concerning) .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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