Dolphin Entertainment, Inc. (NASDAQ:DLPN): When Will It Breakeven?
Dolphin Entertainment, Inc. (NASDAQ:DLPN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Dolphin Entertainment, Inc., together with its subsidiaries, operates as an independent entertainment marketing and premium content development company in the United States. The US$27m market-cap company posted a loss in its most recent financial year of US$4.8m and a latest trailing-twelve-month loss of US$6.0m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Dolphin Entertainment's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Dolphin Entertainment
According to some industry analysts covering Dolphin Entertainment, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$4.8m in 2024. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 160% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Dolphin Entertainment's upcoming projects, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Dolphin Entertainment currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Dolphin Entertainment's case is 52%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Dolphin Entertainment, so if you are interested in understanding the company at a deeper level, take a look at Dolphin Entertainment's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Historical Track Record: What has Dolphin Entertainment's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dolphin Entertainment's board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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