Wednesday, November 18, 2020
Esports Entertainment Group, Inc. (GMBL)
Building a Sturdy Foundation Esports Business
Esports Entertainment Group Inc is a development-stage online gambling company focused purely on esports. The company’s principal business operations include design, develop and test wagering systems.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
In line Q1 results. While there were not significant operations in the quarter, it was not inconsequential. We believe that there is a foundation for strong revenue growth, fueled by the Argyll Entertainment acquisition and plans for tournaments in December. As such, we believe that Q1 revenues, which were $222,000 versus our $200,000 estimate, will ramp to over $2 million in the upcoming quarter.
Gross margins should improve. Cost of Goods was an unusually high $420,000 in Q1, while less than our $500,000 estimate. The company provided incentives in the quarter to lure back players, including rewards and bonus play. Cost of goods should be more normalized, roughly 42% to 44% of revenues in fiscal Q2, as marketing incentives abate …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.