Investing in a turnaround requires a willingness to look past ugly historical numbers, but it also carries a danger. Investors can become so captivated by the possibility of recovery that they start paying today for profits that may never arrive.
Bloomberry Resorts Corporation (PSE: BLOOM) presents precisely this challenge.
On trailing numbers, there is little to excite investors. Bloomberry’s consolidated EBITDA fell from ₱19.3 billion in 2023 to ₱16.6 billion in 2024 and then to just ₱10.2 billion in 2025. Net income followed the same path, from ₱9.5 billion in 2023 to ₱2.6 billion in 2024 before turning into a ₱2.6 billion loss last year.
If valuation were simply an exercise in extrapolating history, BLOOM would not look particularly attractive.
But valuation is ultimately about the future, and the second quarter of 2026 provides the first credible evidence that the company’s earnings trajectory may have started to change.
The question is whether that improvement is strong enough to justify a higher value for the stock.
How Bloomberry got here
Bloomberry’s earnings deterioration did not come from one source.
The company opened Solaire Resort Quezon City in May 2024, which added another major integrated resort to its cost base. At the same time, Bloomberry pushed deeper into digital gaming through MegaFUNalo. This expansion came at a high price.
Operating expenses associated with MegaFUNalo reached about ₱1.9 billion in 2025. Advertising and promotional expenses also increased sharply, with Bloomberry attributing part of the rise to the launch and promotion of the digital platform.
The result was predictable. Revenue did not grow fast enough to absorb the new cost structure, margins collapsed, and earnings turned negative.
A company can lose money because its core business is deteriorating, or it can lose money because it has added capacity and expenses ahead of revenue.
Bloomberry appears to have experienced elements of both. Demand in VIP and premium mass gaming weakened, but the company also absorbed costs from Solaire Quezon City and its digital expansion.
The second quarter may have marked the inflection
Bloomberry’s second quarter offered the clearest evidence so far that operating leverage may finally be working in its favor.
Gross gaming revenue increased 15 percent to ₱16.4 billion, while net revenue rose 11 percent to ₱14.1 billion. EBITDA increased 35 percent to ₱3.4 billion, while the net loss narrowed to ₱345 million from ₱1.4 billion a year earlier.
There is an obvious caveat. Casino earnings are affected by hold rates, and Bloomberry benefited from stronger hold during the quarter.
But even after normalizing for VIP hold, EBITDA increased 8.3 percent to ₱3.0 billion and normalized EBITDA margin improved to 22.3 percent from 21.5 percent.
In other words, luck helped, but it does not explain the entire improvement.
Solaire Entertainment City generated ₱11.5 billion in GGR during the quarter, up 18 percent, while EBITDA increased 40 percent to ₱2.4 billion. Solaire Quezon City contributed another ₱1.3 billion in EBITDA, up 19 percent.
Quezon City’s occupancy rate also rose to 85.6 percent from 61.8 percent a year earlier.
The numbers suggest that Bloomberry’s second resort has moved beyond its initial start up stage and has started to contribute meaningfully to group earnings.
Cost control has also improved. Cash operating expenses rose only 5 percent in the second quarter and 3 percent during the first half, despite continued spending on online gaming.
This creates the possibility of operating leverage: revenue can rise faster than expenses, allowing EBITDA to grow much faster than sales.
FUNaloMax adds another layer to the story
The biggest uncertainty, and perhaps the largest source of upside, comes from digital gaming.
Bloomberry soft launched FUNaloMax on April 6, shut down MegaFUNalo on May 1 and officially launched FUNaloMax on July 3. Unlike its predecessor, FUNaloMax operates on Bloomberry’s proprietary platform.
Management has also said that Solaire Online will migrate to the same platform.
The economic value of digital gaming depends less on whether Bloomberry can attract players and more on whether it can do so at attractive incremental margins.
An online platform has a very different economic structure from a physical resort. Building another Solaire requires billions of pesos in land, construction and fixed assets. Adding digital users does not require Bloomberry to build another hotel room or gaming floor.
This does not make digital gaming automatically profitable. In fact, online gaming operating expenses reached ₱1.8 billion in the first six months of 2026.
The issue is whether the next peso of digital revenue will require the same amount of spending as the previous peso.
If the answer is no, FUNaloMax can create operating leverage. If the answer is yes, digital gaming remains an expensive growth experiment.
We do not yet have enough disclosure to know which outcome will prevail.
What would a recovery look like?
The first half produced ₱27.2 billion in net revenue, ₱6.4 billion in EBITDA and a net loss of ₱470 million.
A positive recovery scenario could therefore look like this:
| ₱ billions | Q1A | Q2A | Q3E | Q4E | FY2026E |
| Net revenue | 13.1 | 14.1 | 15.3 | 16.3 | 58.8 |
| EBITDA | 3.0 | 3.4 | 4.4 | 5.0 | 15.8 |
| EBITDA margin | 22.9% | 24.3% | 28.8% | 30.7% | 26.9% |
| Net income | (0.1) | (0.35) | 0.5 | 1.0–1.1 | 1.0–1.2 |
These are of course estimates, not company guidance.
The revenue assumptions are not particularly heroic. They require net revenue to rise around 9 percent sequentially in the third quarter and another 7 percent in the fourth.
The more demanding assumption is margin recovery.
Our forecast requires EBITDA margin to rise from 24.3 percent in the second quarter to almost 31 percent by the fourth quarter.
Is that possible? Bloomberry generated a consolidated EBITDA margin of 39.9 percent in 2023.
The business therefore does not need to reach a historically unprecedented margin. It needs only to recover part of the profitability lost during the expansion period.
If that happens, full year EBITDA could reach about ₱15.8 billion, more than 50 percent above 2025.
More important, Bloomberry could move back into positive earnings during the second half.
Target valuation
At ₱2.59 per share and about 11.525 billion shares outstanding, Bloomberry has a market capitalization of approximately ₱29.8 billion.
As of June, Bloomberry had ₱31.4 billion in cash, about ₱104.8 billion in long term debt, including the current portion, and another ₱5.5 billion short term loan.
This puts estimated net interest bearing debt at about ₱78.9 billion.
Add that to the market capitalization and Bloomberry’s enterprise value is roughly ₱108.7 billion.
If our 2026 EBITDA forecast of ₱15.8 billion proves correct, the stock trades at about:
₱108.7 billion ÷ ₱15.8 billion = 6.9 times forward EBITDA.
Suppose investors become more confident that the recovery is sustainable and assign Bloomberry an 8 times EV/EBITDA multiple.
This produces:
₱15.8 billion × 8 = ₱126.4 billion enterprise value
Subtract ₱78.9 billion in net debt:
Equity value = ₱47.5 billion
Divide by 11.525 billion shares:
Estimated value = ₱4.12 per share
There is another useful check.
Bloomberry’s current book value is approximately ₱5.13 per share. At ₱2.59, the stock trades at roughly half of book value.
If improving profitability causes the market to rerate BLOOM to only 0.8 times book value, the implied price is also about ₱4.10.
When two different valuation approaches lead to approximately the same number, the result becomes more interesting, though certainly not more certain.
What has to go right
A ₱4.10 valuation is not justified simply because BLOOM once traded above that level. It requires evidence.
The third quarter should provide three useful tests.
Bloomberry should generate more than ₱15 billion in net revenue.
Quarterly EBITDA should move above ₱4 billion.
And most importantly, the company should return to positive net income.
If those numbers appear, investors can begin to treat 2025 as an investment trough rather than the new normal.
This is ultimately the attraction and the risk in Bloomberry today. At ₱2.59, investors are not buying a company with clean trailing earnings. They are buying the possibility that Solaire Entertainment City recovers, Quezon City matures and FUNaloMax turns Bloomberry’s expensive digital experiment into a scalable third earnings engine.
If this story becomes visible in the numbers, ₱4.10 is defensible. If the margins fail to recover, then it is not.
