Summary
- Canadian gamers increased to 23 million in 2020
- Widespread and the acceptance of gaming subscription model
- It is expected that gaming revenue would reach nearly US$ 200 billion by 2023
The gaming and the gambling industries are the two revenue-generating businesses. While some countries have strict gambling rules in place, others are open about it. From mobile games to sports betting apps, the sector has immense potential to grow in the future. Canada’s esports industry alone added C$ 4.5 billion to the GDP in 2019, as per.
Here are some of upcoming gaming and esports stocks that has the potential to steal the show going forward:
- Great Canadian Gaming Corporation (TSX: GC)
Great Canadian Gaming Corporation (GC) is a hospitality and gambling company business with operations spanning across Canada. It offers gambling services, community sports and racing tracks, which is its primary revenue generating model.
The company has a market valuation of C$ 2.56 billion and 57.16 million outstanding shares.
While the stock price increase by just 2.7 per cent in six months time, it jumped by 62 per cent in one year.
The total revenue in Q1 FY2021 was C$ 52.3 million, down by 81 per cent year-over-year (YoY). Due to pandemic-induced slowdown, the company posted a net loss of C$ 44.2 million, down from a profitable terrain in the same quarter last year.
The management commented that the pandemic impacted the operations of the company severely. All gaming facilities, except one in Ontario, were shut down during lockdowns periods.
The company has a price-to-book (P/B) ratio of 5.33x and a debt-to-equity (D/E) ratio of 4.82x
- Enthusiast Gaming (TSX: EGLX)
The company has built a platform for video games and esports, reaching out to 300 million players each month. It mostly caters to millennials across segments like media, esports and talent.
The gaming scrip is trading nearly 48.38 per cent below its 52-week high of C$ 11 (April 21, 2021) and stock price increased by 255 per cent in nine months. It jumped 249.39 per cent in one-year period.
The latest quarterly results highlights, total revenue of C$ 30.0 million in Q1 FY2021, up from C$ 7.1 million in the year ago quarter, an increase of 321 per cent. The increase in advertisement spends, and other costs led to a net loss of C$ 13.6 million, informed the company.
Paid subscribers grew by 49 per cent in one year to reach a network of 137,000 users.
Enthusiast Gaming signed a partnership agreement with ESPAT TV to strengthen its gaming and entertainment business spread across multiple distribution channels. Also, there is a plan in place to create a subscription-based gaming network, as per management’s commentary
- Score Media and Gaming (TSX: SCR)
Digital gaming firm Score Media and Gaming (SCR) engages with fans through media and betting platforms. It also curates innovative content through its social and esports platform.
The company has a market cap of C$ 1.02 billion and the stock is trading nearly 67 per cent below its 52-week high of C$ 56.70 (February 10, 2021). The stock nosedived by 130.75 per cent in one year.
The company posted revenue of C$ 6.4 million in Q3 FY2021, an exponential growth of 270 per cent YoY from C$ C$ 2.4 million in Q3 FY2020.
Its media application registered a record user engagement of 470 million, an increase of 19 per cent year-over-year (YoY)
The company is valued at a price-to-book (P/B) ratio of 3.98x and a debt-to-equity (D/E) ratio of 1.80x
- Engine Media Holdings (TSX: GAME)
Engine Media is in the business of advertising, media and E-sports. It also hosts esports racing and tournament hosting and a broadcasting presence on TV and radio.
The gaming scrip is trading nearly 64.93 per cent below its 52-week high of C$ 483 (January 28, 2021) and stock price increased by 377 per cent in six months and moreover it jumped 4,182 per cent in one year.
The company posted total revenue of US$ 8.4 million in Q2 FY2021, a growth of 12 per cent quarter-on-quarter (QoQ) basis. The higher repayment of debt and non-cash expense led to a net loss of US$ 27.1 million.
The company is valued at a P/E ratio of 0.20 , EPS stands at 0.20, and the return on equity (ROE) is 818.78 per cent nearly.
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