Growing young populations and changing lifestyles have led to an increase in demand for video games over the past couple of years. In addition, increasing engagement activities, huge investments, increase in live streaming of games, and expansion of infrastructure for league competitions are major factors driving the growth of the gaming industry. the sport. The number of esports viewers is expected increase by 11.5% year-on-year to reach 29.6 million in 2022.
Additionally, virtual reality products and consumer spending on video content are growing rapidly around the world. The global esports market is expected to reach $7.13 billion by 2028, registering a CAGR of 25.1%.
As a result, Wall Street analysts expect fundamentally sound esports stock Genius Sports Limited (GENIUS), Esports Technologies Inc. (EBET) and Esports Entertainment Group Inc. (GMBL) to rally over 100% in the coming months.
Genius Sports Limited (GENIUS)
GENI manufactures and sells state-of-the-art products and services to the sports, sports betting and sports media industries. It also provides a technology infrastructure for collecting, integrating and distributing live sports league data; streaming solutions, consisting of technology, automatic production and distribution for sports to market video footage of their games; and end-to-end integrity services for sports leagues.
Last month, GENI announced that it had secured a major official live streaming and fan engagement partnership with Betway, a world-renowned online sports betting and gaming brand. With this new agreement, Betway will receive GENI’s award-winning LiveData and LiveTrading products, which provide real-time data and accurate pricing for NFL and NCAA Basketball, English Premier League and Euroleague Basketball, as part of its long-standing partnership. ‘
Additionally, last month GENI secured a significant expansion of its long-term partnership with bet365. Being one of the first sportsbooks to run Genius Sport’s live streaming service, bet365 has also agreed to a major increase in the company’s premium video content featuring low latency broadcasts from several top global football competitions and NFL to bet365 customers outside of the United States. Genius Sports’ and an expanded streaming solution that will deliver unique new content to help improve bet placement and customer retention for bet365.
GENI’s total revenue increased 70.5% year over year to $69.14 million in the third quarter ended September 30, 2021. Its cash and cash equivalents were to $234.24 million, an increase of 1,888.3% for the nine months ended September 30, 2021.
Analysts expect GENI’s revenue to grow 71.7% year-over-year to $80.72 million in the fourth quarter (ending December 2021).
Of the eight Wall Street analysts who have rated GENI, seven have rated it Buy and one has rated it Hold. The 12-month median price target of $14.86 indicates a 180.4% upside potential. Price targets range from a low of $9.00 to a high of $22.00.
Esports Technologies Inc. (EBET)
EBET primarily develops and operates platforms that focus on esports and competitive games around the world. The Company’s brand portfolio includes Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, GenerationVIP and gogawi.com, a licensed online gaming platform that offers real money betting on sporting events and professional sports.
In December, Turnt Gaming, a developer of NFT-based interactive entertainment products and media, collaborated with EBET and Polygon Studios, the gaming/NFT arm of Polygon designed to enable Web 3.0 integration. This collaboration will serve as a key pillar for Taunt Battleword, a skill-based fighting game simulator featuring legendary boxing icons Floyd Mayweather and Deontay Wilder slated for release in early 2022.
EBET’s net sales increased significantly to $7.14 million in the first quarter ended December 31, 2021. Its gross profit amounted to $2.53 million, compared to a gross loss of $1.47 thousand in the year-ago quarter. Its cash and cash equivalents increased 29.7% for the quarter ended December 31, 2021, to $11.76 million.
EBET’s revenue is expected to grow 38% year-over-year to $99.20 million in fiscal 2023.
The only Wall Street analyst who rated EBET rated it Buy. The 12-month median price target of $18.00 indicates a 105.1% upside potential.
Esports Entertainment Group Inc. (GMBL)
Based in Europe, GMPL is an iGaming entertainment company that operates in the United States and around the world. The Company operates Vie.bet, an esports-focused platform; Sportnation.bet, an online bookmaker and casino; iDefix, a casino platform; Bethard, an online bookmaker and casino; Vie.gg, an online sports betting site; and ggCircuit, LAN center management software for managing critical functions, such as game licenses and payments.
In December, GMBL partnered with the Hard Rock Hotel & Casino Atlantic City, which will launch hosting the first sanctioned skill-based sports betting event in the United States. “We are extremely excited to partner with one of the world’s top hotels and casinos to launch the world of regulated peer-to-peer betting in esports,” said Grant Johnson, CEO of Esports Entertainment Group.
During the second quarter ended December 31, 2021, GMBL net sales increased 515.2% year over year to $14.53 million. Its cash and cash equivalents were $1.04 million.
Analysts expect GMBL’s revenue to rise 423.9% year-over-year to $28.29 million for the third quarter ending March 2022. The stock gained 16 % over the past month.
The 12-month median price target of $19.67 indicates a 562.3% upside potential. Price targets range from a low of $12.00 to a high of $30.00.
Shares of GENI were trading at $5.17 per share on Wednesday afternoon, down $0.13 (-2.45%). Year-to-date, GENI is down -31.97%, compared to a -11.16% rise in the benchmark S&P 500 over the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college, she majored in finance and is currently pursuing the CFA program and is a Level II candidate. Continued…