Esports Entertainment: Mispriced And Misunderstood Future By The Market Equates To Potential Upside

Esports Entertainment: Mispriced And Misunderstood Future By The Market Equates To Potential Upside

October 21, 2021

Price (as of close on October 20, 2021)

$6.28

Rating

BUY

12- Month Target Price

Esports Entertainment (GMBL)

Esports Entertainment delivers 63% sequential revenue growth during Q4:21 and guides for FY:22 revenues exceeding $100 million. We reiterate our Buy rating and   price target. 

FY:21 Highlights

 ➢GMBL operating esports gaming platforms, event venues and owns proprietary esports infrastructure and technology. The eSports gaming market is valued at $750 million and projected to grow to $3 billion over the next five years.   

➢ Q4:21 revenues improve 63% sequentially to $8.8 million and GMBL delivers full-year revenues of $16.8 million via a combination of acquisitions and organic growth.     

➢ GMBL closed the acquisition of Bethard during the June quarter, which gives the company gaming licenses in Sweden and Spain and adds roughly $30 million to annualized revenues. Over the past 12 months the company has closed six significant acquisitions, including Bethard, Lucky Dino, ggCircuit, Helix, FLIP, EGL and Argyll.       

➢ The company has opened and is staffing a New Jersey license in anticipation of securing its New Jersey gaming license. Ohio is the next state where GMBL plans to apply for a license and several additional states are targeted for 2022 as well as the Canadian province of Ontario. 

➢GMBL is guiding for Q1:22 revenues ranging from $16-$16.5 million and FY:22 revenues exceeding $100 million. We reiterate our Buy rating and 

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