Market's view on Gaming Realms
Published on April 2024
- Gaming Realms is perceived as undervalued with a forward and blended PEG ratio of 0.4 times, indicating potential for growth before the market recognises its value.
- Licensing revenue for Gaming Realms increased by 20% year-over-year in the first two months of 2024, reflecting positive business developments.
- There is a suggestion that Gaming Realms might be an attractive takeover target given its current share price vulnerabilities.
- Concerns are raised about the opaque accounting practices, specifically regarding the handling of EBITDA and capitalisation of items, though cash flow remains strong.
- There is a lack of clarity in management’s explanations, particularly concerning operational issues in New Jersey and plans for utilising accumulating cash reserves.
- The possible strategic moves for Gaming Realms include selling the company, merging, or acquiring another company due to limited growth prospects in current operational geographies.
- Gaming Realms has faced a legal challenge regarding alleged plagiarism of its Slingo game’s source code by former staff and a competitor.
- Observers note that no new states in the USA will issue licensing in 2024, which could limit market expansion opportunities.
- There is dissatisfaction among some stock watchers with the company’s direction and management, influencing decisions to sell shares.
- The company’s financial health is noted as stable, with significant cash reserves and a recommendation from Peel Hunt to buy, predicting a stock price target of 60p.