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Summary
- This esports and video game industry witnessed a huge surge when the coronavirus pandemic hit the world.
- The overall esports industry is expected to reach US$ 2.2 billion by 2023.
- Since COVID-19 cases are increasing again, it might be the right time to explore gaming stocks.
Esports and video games have taken up a large portion of consumer time in recent years due to the increasing popularity of multiplayer online and mobile games.
This industry witnessed a huge surge when the coronavirus pandemic hit the world. As we enter extended waves of the COVID-19 pandemic, the esports and gaming industry is expected to boom further.
According to a Markets and Markets report, the overall esports industry is expected to reach US$ 2.2 billion by 2023 and will grow at a compound annual growth rate (CAGR) of 18.16 per cent (2018-2023).
On that note, let's take a look at Enthusiast Gaming Holdings Inc. (TSX:EGLX) and Engine Media Holdings Inc. (TSXV:GAME) stocks that might be worth exploring this year.
Enthusiast Gaming Holdings Inc. (TSX:EGLX)
Esports firm Enthusiast Gaming Holdings Inc. (TSX:EGLX) is reportedly building the largest media platform for the video game. The company has a good presence in the US and it is all set to make its debut on the Nasdaq exchange. In the last 12 months, the paid subscribers of the company grew by 60 per cent to 122,000.
One-year performance of Enthusiast Gaming Holdings (Source: EODHD/Others)
The stock skyrocketed by 596.8 per cent in a year, outperforming the benchmark Canadian equity index TSX Composite 300, which climbed by 426.5 in the same period.
In the last three month, the stock's growth stands at 54.8 per cent, indicating a positive momentum.
Enthusiast Gaming posted strong fourth-quarter results and it achieved revenue of C$ 42.5 million, up by 34 per cent from the previous quarter. During the same period, the gross profit was C$ 8.1 million.
Engine Media Holdings Inc. (TSXV:GAME)
Engine Media Holdings Inc. (TSXV:GAME) is an esports tournament hosting and data provision company that also partners with online media, TV and radio broadcast companies to maximize its revenues.
In a year, the stock grew by 46.7 per cent. Its year-to-date (YTD) growth was 7 per cent. Priced at C$ 11 apiece at market close, it is available at about 39 per cent lower than its 52-week high of C$ 18 (May 14, 2020) and this could be used as an entry point by the investors.
One-year performance of Engine Media (Source: EODHD/Others)
In Q1 2021 (ended November 2020), the company achieved revenue (continuing operations) of US$ 7.5 million, up against US$ 808,248 in Q1 2019. For the same period, Engine Media's cash and cash equivalents increased to US$ 2.7 million from US$ 464,405.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
