When Can We Expect A Profit From GameSquare Holdings, Inc. (CVE:GAME)?
With the business potentially at an important milestone, we thought we'd take a closer look at GameSquare Holdings, Inc.'s (CVE:GAME) future prospects. GameSquare Holdings Inc. operates as a vertically integrated digital media, entertainment, and technology company with an audience of approximately 290 million followers. With the latest financial year loss of US$18m and a trailing-twelve-month loss of US$21m, the CA$27m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which GameSquare Holdings will turn a profit, with the big question being “when will the company breakeven?” 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 GameSquare Holdings
Expectations from some of the Canadian Entertainment analysts is that GameSquare Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$5.7m in 2026. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% 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.
We're not going to go through company-specific developments for GameSquare Holdings given that this is a high-level summary, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 22% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of GameSquare Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – GameSquare Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:
Valuation: What is GameSquare 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 GameSquare Holdings is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GameSquare Holdings’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.
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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.
