When Can We Expect A Profit From Dolphin Entertainment, Inc. (NASDAQ:DLPN)?

With the business potentially at an important milestone, we thought we'd take a closer look at Dolphin Entertainment, Inc.'s (NASDAQ:DLPN) future prospects. Dolphin Entertainment, Inc., together with its subsidiaries, operates as an independent entertainment marketing and production company in the United States. The US$14m 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$15m, as it approaches breakeven. As path to profitability is the topic on Dolphin Entertainment's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Dolphin Entertainment

According to some industry analysts covering Dolphin Entertainment, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$3.5m 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 162%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Dolphin Entertainment's upcoming projects, but, take into account that typically 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 debt-to-equity ratio of 102%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. 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 compiled a list of relevant aspects you should further research:

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.

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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.