Hemisphere Media Group, Inc.'s (NASDAQ:HMTV): Hemisphere Media Group, Inc., the Spanish-language media company, operates broadcast and cable television networks, and digital content platforms. The company’s loss has recently broadened since it announced a -US$3.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$11.1m, moving it further away from breakeven. Many investors are wondering the rate at which HMTV will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for HMTV.

See our latest analysis for Hemisphere Media Group

HMTV is bordering on breakeven, according to the 2 Media analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$12m in 2022. So, HMTV is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which HMTV must grow year-on-year. It turns out an average annual growth rate of 82% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, HMTV may become profitable much later than analysts predict.

I’m not going to go through company-specific developments for HMTV given that this is a high-level summary, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with HMTV is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in HMTV’s case is 94%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on HMTV, so if you are interested in understanding the company at a deeper level, take a look at HMTV’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:

1. Valuation: What is HMTV 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 HMTV 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 Hemisphere Media Group’s board and the CEO’s back ground.

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. 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@simplywallst.com.