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Endeavor Group Holdings, Inc.'s (NYSE:EDR) Shift From Loss To Profit

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We feel now is a pretty good time to analyse Endeavor Group Holdings, Inc.'s (NYSE:EDR) business as it appears the company may be on the cusp of a considerable accomplishment. Endeavor Group Holdings, Inc. operates as an entertainment, sports, and content company in the United States, the United Kingdom, and internationally. The US$13b market-cap company posted a loss in its most recent financial year of US$655m and a latest trailing-twelve-month loss of US$332m shrinking the gap between loss and breakeven. As path to profitability is the topic on Endeavor Group Holdings' 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 Endeavor Group Holdings

Endeavor Group Holdings is bordering on breakeven, according to the 11 American Entertainment analysts. They expect the company to post a final loss in 2021, before turning a profit of US$285m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Endeavor Group Holdings' growth isn’t the focus of this broad overview, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Endeavor Group Holdings is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Endeavor Group Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Endeavor Group Holdings' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

  1. Valuation: What is Endeavor Group Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Endeavor Group Holdings is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Endeavor Group Holdings’s board and the CEO’s background.

  3. 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.