Analysts Are Optimistic We'll See A Profit From Full House Resorts, Inc. (NASDAQ:FLL)

By
Simply Wall St
Published
February 10, 2021
NasdaqCM:FLL
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We feel now is a pretty good time to analyse Full House Resorts, Inc.'s (NASDAQ:FLL) business as it appears the company may be on the cusp of a considerable accomplishment. Full House Resorts, Inc. owns, develops, operates, manages, leases, and invests in casinos, and related hospitality and entertainment facilities in the United States. The company’s loss has recently broadened since it announced a US$5.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$7.5m, moving it further away from breakeven. As path to profitability is the topic on Full House Resorts' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Full House Resorts

Consensus from 3 of the American Hospitality analysts is that Full House Resorts is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$6.2m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 93% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:FLL Earnings Per Share Growth February 11th 2021

We're not going to go through company-specific developments for Full House Resorts given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Full House Resorts is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

  1. Valuation: What is Full House Resorts 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 Full House Resorts 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 Full House Resorts’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. 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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Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.