Stock Analysis

Enthusiast Gaming Holdings Inc. (TSE:EGLX) Is Expected To Breakeven In The Near Future

  •  Updated
TSX:EGLX
Source: Shutterstock

Enthusiast Gaming Holdings Inc. (TSE:EGLX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Enthusiast Gaming Holdings Inc. engages in the media, content, entertainment, and esports businesses the United States, Canada, and internationally. On 31 December 2020, the CA$1.2b market-cap company posted a loss of CA$27m for its most recent financial year. The most pressing concern for investors is Enthusiast Gaming Holdings' 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 Enthusiast Gaming Holdings

Consensus from 6 of the Canadian Interactive Media and Services analysts is that Enthusiast Gaming Holdings is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of CA$9.9m in 2023. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 74% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
TSX:EGLX Earnings Per Share Growth March 25th 2021

We're not going to go through company-specific developments for Enthusiast Gaming Holdings given that this is a high-level summary, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% 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 Enthusiast Gaming Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Enthusiast Gaming Holdings' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

  1. Valuation: What is Enthusiast Gaming 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 Enthusiast Gaming 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 Enthusiast Gaming 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.

If you’re looking to trade Enthusiast Gaming Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether Enthusiast Gaming Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis