Market Sentiment Around Loss-Making Dolphin Entertainment, Inc. (NASDAQ:DLPN)

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 production company in the United States. The US$20m market-cap company’s loss lessened since it announced a US$24m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$22m, as it approaches breakeven. The most pressing concern for investors is Dolphin Entertainment's path to profitability – when will it 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 Dolphin Entertainment

Dolphin Entertainment is bordering on breakeven, according to some American Entertainment analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$7.7m in 2025. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 156%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Dolphin Entertainment's upcoming projects, though, bear in mind that by and large 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 issue worth mentioning. Dolphin Entertainment currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Dolphin Entertainment's case is 98%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Dolphin 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 Dolphin Entertainment, take a look at Dolphin Entertainment's company page on Simply Wall St. We've also put together a list of key factors you should look at:

1. 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.

2. 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.

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.