Is Homeboyz stock a good investment?

Homeboyz Entertainment PLC shares debuted on the Nairobi Securities Exchange (NSE) on December 21 after going through the Ibuka programme. The company went public through a direct listing instead of the traditional IPO process. Homeboyz will trade under “HBE” ticker symbol.

If you are looking for the best companies to invest in Kenya, you may want to know if Homeboyz NSE shares could be right for you. Homeboyz operates in the entertainment and media industry. It makes money from providing event management, soundtrack, public relations, and DJ services. It also runs namesake radio station, which makes money through advertising.

Are Homeboyz’s NSE shares a good investment?

To help you decide if Homeboyz NSE shares may be right for you, we will look at Homeboyz’s past financial statements, market outlook, and revenue and profit projections. Homeboyz shares hit the NSE at an introductory price of Ksh4.66 apiece.

Inside Homeboyz’s financial statements from 2015 – 2019

Homeboyz’s financial statements for the past five years shows a company that has been through highs and lows. The company made a profit of Ksh36.6 million on revenue of Ksh311.5 million in 2019. In 2018, it made a loss of Ksh9.7 million on revenue of Ksh346.5 million.

In 2017, Homeboyz made a loss of Ksh5.6 million on revenue of Ksh371.8 million. The company made a profit of Ksh8.9 million on revenue of Ksh400.8 million in 2016. Homeboyz made a loss of Ksh10 million on revenue of Ksh224.9 million in 2015.

Homeboyz’s market outlook

Homeboyz sees a bright future for its business. In its listing documents, Homeboyz states that its addressable market in Kenya is on track to reach Ksh300 billion in 2023 from Ksh180 billion in 2018. However, the company points out that piracy and services like YouTube that host user-generated content pose a risk to its business.

Homeboyz’s profit and revenue forecast for 2020 – 2023

Before you head out to order Homeboyz’s NSE shares, it helps to first understand how the company expects to perform in the coming years. Homeboyz expects to report a loss of Ksh16.2 million on revenue of Ksh99.4 million for 2020. The company has the Covid-19 pandemic has dealt a blow to its business, particularly the live events segment.

But the company expects its fortunes to improve with time. It expects to make a profit of Ksh25.8 million on revenue of Ksh262 million in 2021. In 2022, Homeboyz expects to make a profit of Ksh104.5 million on revenue of Ksh482.9 million. The company expects a profit of Ksh106.3 million on revenue of Ksh492.4 million in 2023.