The gaming industry has grown by leaps and bounds over the past decade or so and it is expected to grow as a pretty fast clip in the coming years. Hence, it is important for investors to consider promising companies in this sector and one of the most promising ones at this point in time is Canada based Enthusiast Gaming Holdings (TSX.V: EGLX) (OTC: ENGMF).
The company has managed to create the biggest gaming networks spanning North America and the United Kingdom, which is why it is not a surprise that many analysts are quite bullish on the prospects of the Enthusiast stock.
Massive Growth In Monthly Visitors
The biggest gaming network in North America has managed to raise its users count significantly over recent times and recently Enthusiast revealed that collectively, the integrated ecosystem reaches over 200 million gaming enthusiasts on a monthly basis. That is a massive jump and one that underlines the importance of gaming as well as esports and the growth trajectory that those have traversed in recent times.
However, Enthusiast’s growth trajectory has been on a different level altogether and the sheer number associated with the company gives an idea of the sort of growth that it has enjoyed in recent times.
Serves 200 Million Gamers and 1 billion Page Views A Month
The gaming platform managed by Enthusiast gets more than 1 billion page views a month and has a monthly reach of a staggering 200 million gamers on a monthly basis. On the other hand, its reach is further amplified by 100 websites and more than 900 YouTube channels.
Enthusiast Has Among The Lowest Average Revenue Per User (ARPU) in the Industry
Another metric that is worth looking into is the average revenue per user (ARPU) that is being generated by the company. Enthusiast is projected to post revenues of $22 million for the full year and that works out to ARPU of $0.11. That represents one of the lowest ARPU in the industry and even at $100 million, the company will have ARPU of only $0.50. Enthusiast currently has one of the lowest ARPU in the industry, compared. Considering their other competitors are generating a significantly larger ARPU, this is a reasonable goal for Enthusiast to achieve.
This suggests that the company has a massive room for growth and one that could propel it into new heights in the years to come. Enthusiast already boasts of a larger user base and if it can leverage that effectively then it can hope to become one of the biggest gaming and Esports networks in the world.
30 Billion-Plus Advertising Requests
Last but not least the 30 billion-plus advertising requests per month keep adding to Enthusiast’s revenues as well. However, in this regard, it should be noted that the wider gaming and eSports industry is huge, which is why the scope of growth is massive.
Impressive Industry Growth – potential for huge growth for Enthusiast Gaming
The gaming industry is worth $152 billion at this point in time and the number of gamers is pegged at more than 2.3 billion worldwide. On the other hand, the eSports industry is worth $1.1 billion at this point and the strength of the audience is in excess of 495 million. Considering the fact that Enthusiast is engaged in both gaming and eSports, the potential for huge growth is certainly there.
The company has managed to generate growth of 148% this year so far in properties that it owns or operates and it compares favorably against the growth generated by some of the world’s biggest companies in this segment. Those companies include GameSpot, TWITCH.TV and IGN Entertainment.
Experts have projected this $152 billion industry to skyrocket to $300 billion by 2025.
At this point in time, Enthusiast’s 200 million users represent a higher number than those at TWITCH, Huya and DouYu. Considering its user base and the low price of its stock, it is fair to argue that the Enthusiast stock is significantly undervalued by the market.
Analysts Set $3.67 Price Target – signals 127% Potential Upside
Hence, it is not a surprise that MarketBeat analysts have set the 1-year target price at C$3.60 and Yahoo Finance has set the same at C$3.67. The stock is currently trading at C$1.10 and the 12-month target price is a reflection of the enthusiasm towards the stock.
Keep Enthusiast Gaming Holdings (TSX.V: EGLX) (OTC: ENGMF) on your radar as the stock might be all set to bounce back considering the strong technical and fundamentals.