Enthusiast Gaming Holdings - SPONSORED
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. 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 DeckEnthusiast, 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
Reaching this demographic in a surging industry is an unparalleled competitive advantage.
Reaching “The Untouchables”- A Crucial EdgeAlso 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 DeckAdditionally, 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 DeckIt’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 DeckWant 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 DeckPerhaps 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
- 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
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: StockchartsGiven 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…