Analysts Expect Vivid Seats Inc. (NASDAQ:SEAT) To Breakeven Soon

By
Simply Wall St
Published
May 10, 2022
NasdaqGS:SEAT
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at Vivid Seats Inc.'s (NASDAQ:SEAT) future prospects. Vivid Seats Inc. operates as an online secondary marketplace for tickets in the United States and Canada. On 31 December 2021, the US$1.8b market-cap company posted a loss of US$16m for its most recent financial year. As path to profitability is the topic on Vivid Seats' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Vivid Seats

Consensus from 9 of the American Online Retail analysts is that Vivid Seats is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$41m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 35% year-on-year, on average, 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
NasdaqGS:SEAT Earnings Per Share Growth May 10th 2022

Given this is a high-level overview, we won’t go into details of Vivid Seats' upcoming projects, however, keep in mind that generally 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 Vivid Seats is its debt-to-equity ratio of 103%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

  1. Valuation: What is Vivid Seats 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 Vivid Seats 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 Vivid Seats’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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