Wednesday, August 14, 2024
Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Q2 results. The company reported Q2 revenue of $21.6 million, and adj. EBITDA of $3.1 million, both of which were lower than our forecasts of $27.8 million and $7.4 million, respectively, as illustrated in Figure #1 Q2 Results. In our view, there were multiple factors contributing to the shortfall, such as deferred revenue in the quarter, as well as lower than expected revenue from ARK: Survival Ascended (ASA) on Microsoft Game Pass.
Closing the gap. Notably, there is a technology gap between many potential ASA users’ PC hardware and the advanced processing power needed for the game, which uses Unreal Engine 5. This technology disparity has inhibited some users from migrating from the original game, ARK: Survival Evolved (ASE), to ASA, dampening ASA sales. However, an update to Unreal Engine 5 that is expected to take place in Q3. Should the update help bridge the technology gap, it could catalyze accelerated adaption of ASA.
Get the Full Report
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.