Enthusiast Gaming Holdings (NASDAQ: EGLX) is a Canada-based company focused on building a vertically integrated diverse media platform to connect and engage games and esports audience watching, reading, and consuming gaming content.
Enthusiast Gaming Holdings VS. Competitors
Combining the elements of four core pillars: Media & Content, Talent, Esports, and Experiential, Enthusiast Gaming differs from other gaming companies due to its unique engagement offering in more points of connection, providing substantial access to the lucrative Generation Z and Millennial audience.
Through leveraging its vertically integrated media platform and its proprietary mix of digital media and entertainment assets, Enthusiast Gaming enhances engagement with its audience to develop three main revenue streams, notably (1) media and content revenue consisting of digital advertising and content licensing revenue for premier brands, (2) Esports revenue, and (3) subscriptions revenue.
As a result of transformative acquisitions, notably Luminosity Gaming (2019), Omnia Media (2020), and organic growth, Enthusiast Gaming has expanded its media platform for video games and eSports to connect and engage globally.
Enthusiast Gaming reaches over 300 million gamers each month who can participate in many ways. The company’s Media segment consists of 100+ gaming-related websites and 1,000+ YouTube channels that generate views of game-related content.
Its Talent segment works with 550+ leading gamers and influencers to create new and unique talent.
Luminosity Gaming has seven professional eSports teams and franchises, a Call of Duty, and the Overwatch League. Gamers can attend 50 Live and virtual gaming events globally,
The company reported proforma last twelve month (LTM) revenues of US $99.7 million, 25% growth since 2019. The LTM gross profit grew by 120% YTY growth.
Enthusiast recently joined the Comscore 100, which ranks the Top 100 Internet Properties in the US. Specifically, the company was ranked #1 for gaming information property for unique visitor traffic from mobile devices, ahead of Amazon's TWITCH.TV. Other properties on the list include GameSpot, Future Games, FANDOM Games, and IGN Entertainment.
What's Next for Enthusiast Gaming?
Enthusiast Gaming has accelerated plans to launch a gaming social network and premium subscription offering through its latest definitive agreement to acquire Tabwire for $11 million in a mix of cash and stock, as disclosed in its latest quarterly press release.
The company has a complementary approach of M&A and organic growth to build scale and realize higher revenue and margin per gamer. M&A continues to be the company's growth level to monetize its expanding viewership base further. Enthusiast Gaming’s organic growth initiatives drive recurring programmatic advertising to optimize CPMs (CPM stands for cost per thousand impressions), increased direct sales, grow paid subscribers, and licensing content.
About the Global Gaming Market
The robust global gaming market is rapidly expanding and represents one of the fastest-growing segments within the broader media and entertainment ecosystem. According to newzoo, the industry is expected to grow to USD 218 billion by the end of 2023, a compound annual growth rate (CAGR) of 10.3% from 2019 to 2023.
Enthusiastic Gaming Stock
The company's shares have a broad trading range over the last year, with its 52-week high of (USD) $8.88 and a 52-week low of $1.04. At the time of this writing, its market capitalization stands at around $804.7 million. The average daily volume over the last 90 days is 364,169.
This past week, Msci Small Cap Index added Enthusiast Gaming. The shares maintained their listing on the Toronto Stock Exchange and commenced trading on NASDAQ on April 21, 2021.
In February 2021, the company sold 7.383 million common shares at $5.75 each, resulting in net proceeds of nearly $40 million after issuance costs. Enthusiast Gaming will use these proceeds for debt reduction and servicing, capital spending, working capital, and future acquisitions.
Early in May, Enthusiast Gaming filed a shelf registration to allow the company to raise capital to a total of CAD 250 million from time to time during the next 25 months.
Enthusiast Gaming has a unique opportunity to leverage its vertically integrated platform to grow its base across its markets and improve monetization. The company’s challenge is to use disciplined M&A integration and to execute its growth and margin strategy.
Disclosure: Your Money Geek has been paid $500 by a third party to provide this article coverage on 06/1/2021 for Enthusiast Gaming Holdings (NASDAQ: EGLX).