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Breakeven Is Near for Madison Square Garden Sports Corp. (NYSE:MSGS)

·3 min read

We feel now is a pretty good time to analyse Madison Square Garden Sports Corp.'s (NYSE:MSGS) business as it appears the company may be on the cusp of a considerable accomplishment. Madison Square Garden Sports Corp. operates as a professional sports company. The US$4.3b market-cap company’s loss lessened since it announced a US$14m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.9m, as it approaches breakeven. The most pressing concern for investors is Madison Square Garden Sports' 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.

Check out our latest analysis for Madison Square Garden Sports

Consensus from 6 of the American Entertainment analysts is that Madison Square Garden Sports is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$16m in 2022. So, the company is predicted to breakeven approximately a year 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 84% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Madison Square Garden Sports' upcoming projects, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Madison Square Garden Sports is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Madison Square Garden Sports 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 Madison Square Garden Sports, take a look at Madison Square Garden Sports' company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

  1. Valuation: What is Madison Square Garden Sports 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 Madison Square Garden Sports 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 Madison Square Garden Sports’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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.