Recent acquisitions further symbolize the management strategy

Esports Entertainment: Recent acquisitions further symbolize management strategy

Esports Entertainment is an online gambling company that offers esports entertainment, esports betting and gaming, and traditional sports betting. The company offers sports betting, fantasy betting and pools on a variety of esports events on its licensed and secure Vie.gg betting platform, and also owns and operates online bookmaker SportNation.bet. In late 2020, Esports Entertainment became the first esports gaming company to obtain a US gaming license.

November 18, 2021

Price (as at the end of November 17, 2021)

$6.13

Rating

TO BUY

Target price for 12 months

Esports Entertainment (GMBL)

Esports Entertainment revenues grow 86% sequentially and increase $16.2 million year-over-year. The company expects revenue growth of 490% and revenues in fiscal year 2022 exceeding $100 million.

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P1:22 Highlights

➢ GMBL operates e-sports gaming platforms and event venues and has its own e-sports infrastructure and technology. The company provides partnerships with professional sports teams that attract new players to its gaming sites and complements its digital assets with on-site Helix gaming centers.

➢The Company’s Q1 2022 revenue increased 86% sequentially to $16.4 million and gross margin increased 200 basis points to 61% from 59% a quarter ago. Operating loss narrowed to $8.6 million from $10.5 million a quarter earlier.

➢GMBL recently completed the acquisition of Bethard, which provides gaming licenses in Sweden and Spain and another $30 million in annual revenue. Over the past 12-14 months, the Company has completed six major acquisitions and in fiscal 2022, it will focus on integration, cross-selling and leveraging synergies from acquired businesses.

➢The company expects to secure gaming licenses in New Jersey before the end of the year, and in 2022 it plans to obtain gaming licenses in Ohio and the Canadian province of Ontario.

➢GMBL forecasts FY22 revenues of over $100 million and positive adjusted EBITDA at the end of FY22.

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