Rivalry Corp. (CVE:RVLY): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Rivalry Corp.'s (CVE:RVLY) future prospects. Rivalry Corp., through its subsidiary, Rivalry Limited, operates as a sport betting and sports media property that offers regulated online wagering on esports, traditional sports, and casino for bettors. The CA$61m market-cap company posted a loss in its most recent financial year of CA$31m and a latest trailing-twelve-month loss of CA$28m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Rivalry will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Rivalry

Consensus from 2 of the Canadian Hospitality analysts is that Rivalry is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CA$1.1m in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% 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.

We're not going to go through company-specific developments for Rivalry given that this is a high-level summary, but, 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’d like to point out is that Rivalry has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is Rivalry 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 Rivalry 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 Rivalry’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.

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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.