With Potentially 187+% Of Upside, Enthusiast Gaming Holdings (NASDAQ: EGLX)(TSX: EGLX) May Be Your Best Bet in the $180.1 Billion Gaming Boom So Much So, That Even The Biden-Harris Campaign Partnered With Them Video games and esports are exploding. But you probably knew that already. More likely than not, you or a family member is a gamer. A recent report from the Financial Post, after all, claimed that nearly half of the world’s 7.7 billion people are gamers. People are not just playing video games now. In fact, the viewership is getting so massive in esports that the League of Legends World Championship drew a larger viewership than the SuperBowl in 2018! Maybe it’s time you put down the controller, though, and looked for ways to profit from this boom. The industry is practically printing money and shows no signs of stopping. Did you know that gaming revenue has now eclipsed box office and sports revenue combined? According to Tech Jury, the gaming industry saw $159.3 billion in revenue at the end of 2020, but by the end of 2021, we could reach $180.1. Mordor Intelligence goes a step further and states that the industry could be a $314.40 billion behemoth by 2026. Some of the greatest sports minds now own esports organizations, including Jerry Jones, Michael Jordan, Robert Kraft, Mark Cuban, Magic Johnson, Stan Kroenke, and many more. Celebrities and athletes alike are also getting in on the action by investing in teams like Drake, Tony Robbins, Sean “Diddy” Combs, Steph Curry, Kevin Durant, Tony Hawk, and Zlatan Ibrahimovic, Shaquille O’Neal, Alex Rodriguez, Ronaldo, and many others. However, this is just scratching the surface, and companies like Enthusiast Gaming Holdings (NASDAQ: EGLX)(TSX: EGLX) are at the forefront of the fastest growing trends in this entire industry. Why? Enthusiast Gaming is one of the largest vertically integrated gaming companies globally. It focuses on targeting Gen Z and Millenials through esports through media rights, marketing, advertising, and sponsorships. If you thought gaming as a whole was a booming industry, just look at these eye-popping figures that could be the most explosive opportunities in the entire industry.
Source: EGLX Investor DeckMoney is pouring into esports through media rights, live event ticket sales, merchandise sales, and in-game purchases. But 69% of this revenue comes from sponsorships and advertising alone, per Newzoo figures cited by Statista. In a nutshell, that’s why Enthusiast Gaming Holdings (NASDAQ:EGLX)(TSX:EGLX) is not your typical run-of-the-mill gaming and esports play. The company has seen astounding growth and has a generational type of upside, according to several analysts. With operations tailor-made to the industry’s future, read on to see why this company could indeed be a rare breed with mouth-watering potential.
What Exactly is Enthusiast Gaming Holdings (NASDAQ:EGLX)(TSX:EGLX)? What’s Its Advantage?Enthusiast Gaming is at the forefront of esports explosive growth through focusing on media, fan engagement & experiences, and marketing, advertisements & sponsorships. It is a Top 100 Internet Property in the U.S., according to Comscore, and is a leading player in an under-monetized growth segment of the gaming ecosystem. It sits right at the center as the heartbeat, connecting everyone between publishers, broadcaster platforms, and fan communities.
Source: EGLX Investor Deck Enthusiast, first and foremost, boasts second-to-none fan engagement and experiences. It is genuinely on the cusp of building the most prominent global media platform for gaming and esports enthusiasts that the world has ever seen.
Source: EGLX Investor DeckWith so many connection points, it’s no wonder why the company’s engagement numbers are through the roof. Owning the fan experience is Enthusiast’s bread and butter. The company engages with fans on all platforms that meet their gaming habits.
- 300M Average Monthly Gamers
- 550+ Influencers and Content Creators–including top Twitch and YouTube Streamers
- 132M esports Social Followers
- 41B LTM Q1 2021 Total Content Views
- 100B Active Sites With 1B+ views
- 20M YouTube Subscribers
- 1000+ YouTube Channels with 3B+ Views
- 6 Professional esports Teams
- 50 Global Virtual and Live Events–including 12M online views, the largest gaming expo in Canada, and the largest B2B mobile game event in Europe
Beyond these engagement numbers, Enthusiast also owns Luminosity Gaming, the #1 most watched esports org on Twitch, with 132 million social followers worldwide and +1B all-time views. Yet the company hasn’t stopped there… On Nov 23, 2021, Enthusiast announced its $44 million acquisition of Outplayed. Outplayed owns League of Legends fan community U.GG, one of the world’s largest League of Legends fan communities. Forecasts show that this arrangement could pay an additional $12 million under an earnout agreement over two years. Additionally, U.GG is expected to generate approximately $8 million in revenue and a net operating income of roughly $3 million in 2022. This deal also comes on the heels of Enthusiast’s acquisition of casual game publisher Addicting Games for a cool $35 million. But don’t take our word for it…. Take it from the horse’s mouth. Before uplisting to the Nasdaq, Enthusiast CEO Adrian Montgomery summed up how genuinely astounding the company’s reach, engagement, and fan experience is to the Globe and Mail: “One out of every two American males between 18 and 34 visits an Enthusiast Gaming property every month, which is a pretty powerful statistic and a statistic a lot of traditional media companies would be envious of.”
Reaching this demographic in a surging industry is an unparalleled competitive advantage.
Reaching “The Untouchables”- A Crucial Edge Also known as “untouchables” because of how hard they are to reach, Gen Zs are a challenging market. They are also one of history’s most consequential generations and are already influencing household purchasing decisions. As they grow up, they are also gaining economic power. Based on how they spend their time and interactions, Enthusiast Gaming Holdings’ (NASDAQ: EGLX)(TSX: EGLX) future growth potential could be staggering and tailor-made for this demographic.
Source: EGLX Investor Deck Additionally, gaming is the new social network, and Enthusiast has capitalized. While Enthusiast’s monthly unique visitors among the 18-34 demographic have exploded by 146.9%, Facebook’s have fallen by 15.1% in the same period. 63% of Enthusiast’s audience don’t even use Facebook.
Source: EGLX Investor Deck It’s no wonder that Enthusiast’s engagement is soaring with this demographic. Just look how deeper the company’s engagement is than larger and more established social media platforms and sports platforms.
Source: EGLX Investor Deck Want some more evidence as to how successful Enthusiast Gaming has been at reaching this elusive demographic? The Biden-Harris campaign actually commissioned the company to help reach young Americans. Through Enthusiast’s gaming platforms, the campaign partnered with Enthusiast to amplify the campaign’s message, driving both turnout and sentiment for the election. Judging by how the election turned out (depending on who you ask), it’s safe to say that partnering with Enthusiast was a rousing success.
Source: EGLX Investor Deck
Samsung also engaged Enthusiast to drive awareness and market share for its gaming-focused computing components and accessories among Gen Z and millennial gamers.
Source: EGLX Investor DeckBut it hasn’t stopped with Biden-Harris and Samsung. Other major brands have also partnered with Enthusiast for similar reasons. Because Enthusiast holds the key to some of the most desired and hard-to-reach audiences, premier brands consistently trust it to target and deliver their marketing campaigns. Enthusiast has the unique ability to reach Gen Zs and millennials. Major brands, who otherwise would be out-of-touch, have been begging for Enthusiast’s integrated solutions.
Source: EGLX Investor DeckThe bottom line is that Enthusiast offers differentiated advertising, experiential, and influencer campaigns for its brand partners. All with the end goal of helping them speak to and engage with its audience of 300 million average monthly gamers. Enthusiast offers a flexible suite of cross-platform marketing solutions, including owned and operated content, influencers, esports sponsorships, and global live events.
Source: EGLX Investor DeckRecord Earnings and an Organic Growth Strategy Enthusiast is well-positioned for continued revenue and margin growth thanks to an innovative, 4-Phase Organic Growth Strategy.
Source: EGLX Investor Deck Perhaps that’s why the company just weeks ago announced blowout financial results for the three and nine months ended Sept 30, 2021, including:
- Record revenue of $43.3 million, including direct sales of $6.8 million
- Record gross profit of $10.1 million
- Paid subscribers reaching an all-time high of 207,000
Beyond these record-setting numbers, though, the growth figures are staggering:
- Revenue of $43.3 million, a 165% increase vs. revenue of $16.3 million in Q3 2020
- Direct sales of $6.8 million, a 580% increase vs. direct sales of $1.0 million in Q3 2020
- Gross profit of $10.1 million, a 146% increase vs. gross profit of $4.1 million in Q3 2020
- Paid subscribers of 207,000 as of Sept 30, 2021, an 85% increase vs. paid subscribers of 112,000 as of Sept 30, 2020
- Cash balance of $33.5 million as of Sept 30, 2021, as compared to $4.3 million as of Dec 31, 2020
Maybe That’s Why The Enthusiast Gaming Holdings (NASDAQ: EGLX)(TSX: EGLX) Stock’s Breaking Out…
And Analysts Give It Upside As High as 187+%…Enthusiast Gaming (NASDAQ: EGLX)(TSX: EGLX) commenced trading on the NASDAQ on Apr 20, 2021. While sometimes uplisting can cause a stock to go through some choppy waters, the EGLX stock could be amid a bullish reversal, rising 48.75% between Nov 5 and Nov 23, 2021.
Source: Stockcharts Given the rapid growth of the esports industry, the company’s staggering earnings and recent stock performance could be a sign of things to come. Maybe analysts sure seem to think so. Many big-time investment firms give EGLX some eye-popping price targets. RBC gave it $9, Scotiabank gave it $9.75, Canaccord Genuity gave it $11, and most notably, Haywood Securities gave it $12. Why’s Haywood so bullish? They specifically noted acquisitions & organic growth, monetization strategy, and macro-level gaming tailwinds as crucial investment drivers. If you don’t feel like doing the math, we’ll do it for you. Haywood’s $12 price target gives the stock potentially 187.08% of upside room to run from its $4.18 price as of midday Nov 23. Risks Although Haywood was the most bullish analyst on Enthusiast Gaming, they also suggest being mindful of the following: Adtech and Programmatic Optimization: Unless optimization tools used by Enthusiast become enhanced or upgraded, they could eventually be rendered obsolete by technological advances. Use of Ad-Blockers: Ads and sponsorships are a big part of Enthusiast’s revenue stream. Companies are continually developing ad-block products that help users prevent ads from appearing on web browsers. Competitive Business: esports is an increasingly competitive and saturated business. While Enthusiast is genuinely building something special and its competitive edges are notable, competitors are constantly sprouting up. If someone comes along and develops a more compelling or engaging product than Enthusiast, it could negatively affect the company. Reliance on Management and Key Personnel: The company’s operations are dependent on the ability, expertise, and judgment of senior management. Meet Enthusiast Gaming Holdings (NASDAQ: EGLX)(TSX: EGLX) All-Star Leadership Team ADRIAN MONTGOMERY CHIEF EXECUTIVE OFFICER Adrian has been a senior officer and director of several public and private companies in media, sports and entertainment, finance, and industrial services. He recently served as president and CEO of Canucks Sports and Entertainment, one of Canada’s premier sports and entertainment organizations. Adrian is the former president of Tuckamore Capital Management, a conglomerate with over $700 million annual revenue. He was also the former CEO of QM Environmental, one of Canada’s largest contracting companies. Mr. Montgomery has been active in the political process throughout his career. He has served as a political advisor to Leaders at all levels of government. Mr. Montgomery is also a member of the New York State Bar Association. THAMBA THARMALINGAM CHIEF OPERATING OFFICER Thamba is a results-driven executive with a strong track record driving growth, innovation, and digital transformation. He joins Enthusiast Gaming after being Managing Partner at a boutique VC firm. Before that, he held various senior executive roles at Rogers Communications for 10 years, leading sales & marketing functions including revenue, Subscriber growth, product, commercial strategy, pricing, base management, & retention for Mobile and Cable business units. Thamba started his career in Software Development & Product Management with Technology companies including ATI Technologies, AMD, Fed-Ex & a CRM Start-up. He holds a Bachelor of Mathematics degree from the University of Waterloo and a Master’s in Business Administration from Ivey Business School. He has also completed the Executive Development Program for Tech/Media/Telecom executives at Harvard University. MENASHE KESTENBAUM PRESIDENT Menashe began his career in video games when he was 13, writing for IGN, a large gaming media site, where he eventually became a community leader. After studying and subsequently lecturing in the Institute of Advanced Talmudic Law in Jerusalem for eight years, Menashe returned to his passion for the video game industry and launched his first gaming blog, “Nintendo Enthusiast,” in 2011. In 2014, he returned to Toronto and incorporated Enthusiast. He has personally owned and operated gaming websites to a readership of over 2 million gamers and has led Enthusiast and grown a writing and community staff team of over 84 people. CANDICE LEVY VP, PEOPLE & CULTURE Candice’s expertise with People & Culture spans over 20 years. She has a proven track record of successfully translating business needs into People & Culture strategies, driving improved results. As a Human Resources Leader and Certified Executive Coach, Candice has extensive experience in talent management and strengthening employee engagement. Before joining Enthusiast Gaming, Candice was the VP, People & Culture at TeraGo, a publicly-traded IT Solutions company. She was the Organizational Development lead at Jamieson Vitamins, following over a decade as an HR Business Partner at Rogers. She was a member of the Rogers Digital Media Senior Leadership Team. She is designated a Certified HR Leader by the Canadian HR Professionals Association. She holds an Associate Executive Coaching Certification from the International Coach Federation via Royal Roads University. Candice completed her Bachelor of Arts specialized in HR and Psychology at York University. ALEX MACDONALD CHIEF FINANCIAL OFFICER Alex is an experienced public company CFO and financial professional. He was the CFO of Aquilini GameCo Inc. Alex led the 2019 mergers and acquisitions between Aquilini GameCo, Enthusiast Gaming Properties, Luminosity Gaming, and J55 Capital, becoming the CFO of the resulting issuer (Enthusiast Gaming). Before this, he was the CFO of TSXV listed Peeks Social Ltd. (previously Keek Inc.) from 2014-2018, having also served on the board of directors in 2015. He is experienced in overseeing “go-public” transactions, managing growth stage companies, and Canadian expansions into the United States. Alex is a Chartered Professional Accountant and Chartered Accountant (CPA, CA) and a graduate of the University of Toronto. He also serves on the board of directors of the NATO Association of Canada, acting as Treasurer on the executive committee. ERIC BERNOFSKY CHIEF CORPORATE OFFICER Eric is a seasoned media and technology executive with experience in finance, corporate development, operations, and capital markets. He was the founding CFO of Enthusiast Gaming. Eric later served as its COO, leading the company through three rounds of seed and growth capital before leading its go-public transaction in 2018 and its merger with Aquilini GameCo/Luminosity Gaming in 2019. He has overseen the company’s growth from pre-revenue to over $100 million in annual revenue. As Chief Corporate Officer, Eric oversees Strategy and M&A as well as Investor Relations, Public Relations, and Corporate Services. KEY TAKEAWAYS FOR INVESTORS: Enthusiast Gaming in more ways than one is a rare breed. You could call it an esports company, but that honestly doesn’t do it justice. Sure, it’s at the forefront of an industry that’s soaring by billions and billions of dollars annually. Still, it’s a rare breed in that it appeals to both Gen Zs and Millennials, some of the largest companies in the world, and even the most recent successful U.S. Presidential campaign. What existing company has more 18-34 engagement than Facebook, works with brands like Samsung, and gets commissioned by a presidential campaign? With over 300 million gaming enthusiasts monthly, and a strategic growth plan, it’s safe to say that this disruptor may only just be getting started. After all, some of the largest investment firms out there seem to think so. Most notably, Haywood’s $12 price target gives the stock potentially 187.08% of upside room to run from its $4.18 price as of midday Nov 23. If things keep progressing the way they are for Enthusiast Gaming, imagine the possibilities…
Digital Marketing Agency of Record: GloBull Technologies Inc., (“GloBull”).
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(a) revenue generating potential with respect to Enthusiast Gaming Holdings ’s industry;
(b) market opportunity;
(c) Enthusiast Gaming Holdings ’s business plans and strategies;
(d) services that Enthusiast Gaming Holdings intends to offer;
(e) Enthusiast Gaming Holdings ’s milestone projections and targets;
(f) Enthusiast Gaming Holdings ’s expectations regarding receipt of approval for regulatory applications;
(g) Enthusiast Gaming Holdings ’s intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and
(h) Enthusiast Gaming Holdings ’s expectations regarding its ability to deliver shareholder value.
Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about:
(a) the ability to raise any necessary additional capital on reasonable terms to execute Enthusiast Gaming Holdings ’s business plan;
(b) that general business and economic conditions will not change in a material adverse manner;
(c) Enthusiast Gaming Holdings ’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;
(d) Enthusiast Gaming Holdings ’s ability to enter into contractual arrangements with additional Pharmacies;
(e) the accuracy of budgeted costs and expenditures;
(f) Enthusiast Gaming Holdings ’s ability to attract and retain skilled personnel;
(g) political and regulatory stability;
(h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms;
(i) changes in applicable legislation;
(j) stability in financial and capital markets; and
(k) expectations regarding the level of disruption as a result of CV-19.
Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance, or achievements of Enthusiast Gaming Holdings to be materially different from any future plans, intentions, activities, results, performance, or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation:
(a) Enthusiast Gaming Holdings ’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations;
(b) public health crises such as CV-19 may adversely impact Enthusiast Gaming Holdings ’s business;
(c) the volatility of global capital markets;
(d) political instability and changes to the regulations governing Enthusiast Gaming Holdings ’s business operations
(e) Enthusiast Gaming Holdings may be unable to implement its growth strategy; and
(f) increased competition.
Except as required by law, Enthusiast Gaming Holdings undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither does Enthusiast Gaming Holdings nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency, or completeness of the information in this document. Neither Enthusiast Gaming Holdings nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this document by you or any of your representatives or for omissions from the information in this document.
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