Dolphin Entertainment, Inc.'s (NASDAQ:DLPN) Shift From Loss To Profit

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 entertainment marketing and production company in the United States. The US$16m market-cap company posted a loss in its most recent financial year of US$13m and a latest trailing-twelve-month loss of US$6.1m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Dolphin Entertainment will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to some industry analysts covering Dolphin Entertainment, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$2.2m in 2026. So, the company is predicted to breakeven just over a year from today. 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 158%, which is extremely buoyant. 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.

View our latest analysis for Dolphin Entertainment

Before we wrap up, there’s one issue worth mentioning. Dolphin Entertainment currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Dolphin Entertainment to cover in one brief article, but the key fundamentals for the company can all be found in one place – Dolphin Entertainment's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

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.