Why Esports Entertainment Group, Inc. (NASDAQ:GMBL) Could Be Worth Watching

Esports Entertainment Group, Inc. (NASDAQ:GMBL), is not the largest company out there, but it led the NASDAQCM gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Esports Entertainment Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Esports Entertainment Group

What is Esports Entertainment Group worth?

According to my valuation model, Esports Entertainment Group seems to be fairly priced at around 8.02% above my intrinsic value, which means if you buy Esports Entertainment Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $11.63, there’s only an insignificant downside when the price falls to its real value. What's more, Esports Entertainment Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Esports Entertainment Group?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 96% over the next couple of years, the future seems bright for Esports Entertainment Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in GMBL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on GMBL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Esports Entertainment Group as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Esports Entertainment Group (of which 1 doesn't sit too well with us!) you should know about.

If you are no longer interested in Esports Entertainment Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

If you’re looking to trade Esports Entertainment Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.