ePlay Digital (EPY) stock : Is there more room for growth?

ePlay Digital Inc (EPY: CNX) stock has rocketed by 500 per cent in the last nine months. However, the Canadian Securities Exchange-listed company recently announced its decision to partner with Spartan, a leading sports and wellness brand. The collaboration plans to leverage and strengthen the digital presence of ePlay through mobile sports, eSports platforms. The management also believes that it will open avenues in the sports apparel segment.

EPY Stock Fundamentals

ePlay Digital offers social media, broadcasting, and live streaming services. It also has a social gaming segment under its sports entertainment division.

The mobile game and media stock closed at 4 per cent down at C$ 0.12 apiece on Aug 3, 2021, from its previous close of C$ 0.125 apiece.

The stock is trading nearly 700 per cent above its 52-week low of C$ 0.0150 attained on August 31, 2020. However, the scrips are nearly 67 per cent below its 52-week high of C$ 0.36 apiece, which it attained on June 23, 2021, indicating investors still have room for making an entry.

In one year, the stock gained by 380 per cent. It has climbed nearly 243 per cent up on a year-to-date (YTD) basis.  

The company holds a market cap of C$ 10.17 million and has 84.53 million outstanding shares.

EPY Financials

The company’s revenue stood at C$ 0.021 million for the quarter ending March 31, 2021, down from from C$ 0.025 million for the quarter ended March 31, 2020. Its net loss also widened to C$ 0.33 million for the quarter from the C$ 0.14 million a year ago.

On an annual basis, ePlay Digital posted total revenue of C$ 0.05 million in FY2020, which increased from C$ 0.03 million in FY2019, an increase of C$ 0.02 million year-over-over (YoY).

At the end of the year, the company incurred a loss of C$ 0.33 million, lower than the net loss of C$ 3.22 million posted in FY2019.  

As per the management’s commentary, the company has a working capital deficit of C$ 0.20 as of December 31, 2020, that has been funded by equity and loans from third parties.

The entertainment scrip holds a return on equity (ROE) of 67.77 per cent.

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Bottomline

EPY stock has been steadily rising for the last couple of months. The scrips gaming titles with Howie Mandel has crossed 100,000 downloads, which is likely to impact the company’s overall valuation. The stock is also trading about 67 per cent below from its all time high.

Investors interested in gaming and media stocks can explore this upcoming firm. However, all decisions should be thoroughly evaluated from an investment perspective.