PlayAGS Stock Not Playing Around, Could Be Double in Making
Quietly, PlayAGS (NYSE:AGS) stockpile is single of this year’s best-performing gaming equities, and i analyst is wagering there’s often more upside to live had.
In a recent line to clients, B. Riley psychoanalyst David Bain initiated reportage of the gambling casino engineering and games provider with a “buy” rating and a $21 price target. That implies the shares can nearly three-fold from the June 11 closelipped at $10.80. The psychoanalyst sees an array of catalysts potentially impulsive shares of the Las Vegas-based keep company higher.
We expect AGS’s mathematical product roadmap to substantively bottom the $1.5 1000000000000 premium casino gritty segment, currently AGS’s whitespace,” said Bain. “Further, AGS’s high-margin, recurring revenue tabulate business organization is underfollowed and undervalued, particularly precondition its 2H21 tabularise shuffler expansion, inwards our view.”
The analyst’s bullish scene on PlayAGS arrives at a time when some gaming equities are dithering. But that’s far from the pillowcase for the shaper of electronic gaming machines and table games, among other products. Helped by a take in of 29.65 percent over the past tense month, PlayAGS is upwards 50 percent year-to-date.
PlayAGS Stock Powerful Gaming Idea
With a securities industry capitalization of simply under $418 million, PlayAGS is unity of the smallest publicly traded gaming names in the US. That affirms its obscure gem status, but it doesn’t belittle its potency strength for investors.
PlayAGS gillyflower is extremely levered to strength in regional casinos because 80 percent of its recurring revenue comes from those venues. The fellowship has nearly 24,000 gaming participation units, which are found inwards casinos inwards regional markets and those hard frequented by locals. That tethers the shares to themes such as repressed demand, rising rates of COVID-19 vaccination, and older gamblers returning to their favorite local gaming venues. In fact, some metrics for the society are already pacing forward of pre-pandemic levels.
“1Q21 domestic participation per unit win exceeded pre-pandemic/1Q19 levels, and checks cite continued win strength,” said Bain. “Improved public presentation is impelled past warm legion markets, pruning of lower-performing locations/units, improved cognitive content offerings, and a new, higher intermixture of premium recurring revenue gamy installations, inwards our view.”
PlayAGS: Catalyst-Rich Story
Even with the lately astral execution of PlayAGS, the gaming call has ample tailwinds, including a long runway with which to raise market place percentage inward the insurance premium games segment.
“AGS’s insurance premium gamey market place incursion is substantially under 1 percent, leaving sizeable whitespace. AGS only when lately began a substantive thrust into the premium segment, increasing its humble of insurance premium units through the pandemic,” said Bain.
If the accompany could get its premium games share to trio percent, that would be worth $10 a share, which isn’t accounted for inward B. Riley’s price target, according to the analyst.
Adding to the PlayAGS example is that even out with the stock’s recent surge, it’s allay inexpensive, trading at 5.9x estimated 2023 enterprisingness value/earnings before interest, taxes, depreciation and amortisation (EBITDA) compared to 9.1x for rivals. If the nominate rerates to its peer group, it could trade upward to $24, adds Bain.