$EGLX has already gone to the Moon But we think it can go to Mars

Brief DD

** Target Price at the end of the thread**

@GetBenchmarkCo @WeAreEnthusiast @wycapital @GRDecter @alexkagin @ThomasVidaI

The company owns multiple gaming assets

100 gaming websites
1000+ Youtube channels,
Partnerships with 500+ gaming influencers,
Canada’s largest gaming expo EGLX
Esports teams ( @Luminosity)

$EGLX has diversified exposure to the gaming sector and the focus is "off the game fan experience"- whichever subsegment grows they can enjoy the ride.

For example, let's say in 2021 AR/VR gaming becomes popular. They won't be impacted as much as let say a mobile gaming comp

EGLX creates a flywheel effect within and between business segments.

As you can see below a gamer is basically trapped in their eco-system once it finishes playing a video game

Their gaming assets attract over 300m gamers and 4bn views. These are mostly Gen-Z and Millennials

All of this traffic has $0 SEO/ Marketing expense. It's all organic.

Company in coming years will monetize this unique audience - who are not on traditional social media - FB

$EGLX plans to increase the ARPU from currently 0.40 to $3 per user annually (see below how).

The company can become a cash cow if it unlocks a fraction of the ARPU generated by the likes of $SNAP

Direct ads with Tier 1 partners will serve as a catalyst to unlock ARPU

We used the sum of the parts (SOTP) approach to value this company. The final valuation is a combination of PV of its media and content segment and the valuation of its esports team via EV/Sales multiple of E-Sports team.

Optionality highlighted below can serve as a bullish case to our Target Price:

NASDAQ Listing, they are currently traded OTC
Entering the E-sports betting market
Gaming content licensing with ROKU
Sell user data

They can also be an acquisition target for the gaming conglomerates like Tencent. This would allow them to own a wide variety of marketing avenues for all of their gaming properties. In all honesty, their annual marketing expense would be more than Enthusiast current market cap

Some sensitivity analysis below

Our suggested target price for $EGLX would is $11.6 -offering a 30-40% upside.

If you want to do dig deeper we have also done a detailed analysis


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