Loss-Making Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) Expected To Breakeven In The Medium-Term
Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hall of Fame Resort & Entertainment Company, a resort and entertainment company, doing business as the Pro Football Hall of Fame. With the latest financial year loss of US$93m and a trailing-twelve-month loss of US$19m, the US$70m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Hall of Fame Resort & Entertainment will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Hall of Fame Resort & Entertainment
Expectations from some of the American Hospitality analysts is that Hall of Fame Resort & Entertainment is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$21m in 2024. Therefore, the company is expected to breakeven roughly 2 years 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 57% year-on-year, on average, which signals high confidence from analysts. 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 Hall of Fame Resort & Entertainment's upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Hall of Fame Resort & Entertainment is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Hall of Fame Resort & Entertainment's case is 80%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Hall of Fame Resort & Entertainment which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Hall of Fame Resort & Entertainment, take a look at Hall of Fame Resort & Entertainment's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:
Historical Track Record: What has Hall of Fame Resort & 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 Hall of Fame Resort & 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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