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EGLX price target cut at RBC

EGLX stock

RBC Dominion Securities analyst Drew McReynolds likes Enthusiast Gaming Holdings (Enthusiast Gaming Holdings Stock Quote, Chart, News, Analysts, Financials TSX:EGLX), but just a little bit less these days.

As reported by the Globe and Mail, the analyst February 6 cut his price target on EGLX from $2.00 to $1.50 while maintaining his “Outperform” rating on the stock.

“We attribute the meaningful underperformance in the stock to the combination of ongoing management changes, the lack of profitability and limited liquidity in a more challenged operating environment characterized by a downturn in advertising and higher interest rates,” McReynolds wrote. “Despite what we believe is a much higher risk profile for the stock in the current environment, we continue to see a plausible path to turning EBITDA positive in 2024 driven by structural tailwinds within gaming, improved monetization of the audience network and gross margin expansion. With this potential inflection point on profitability and what appears to be adequate liquidity to deliver on near-term growth objectives, we continue to see value in the stock providing investors with unique exposure to an attractive global gaming ecosystem.”

Toronto-based Enthusiast Gaming owns digital media and entertainment assets including a network of online gaming-related websites including he websites Destructoid and Escapist Magazine.

At press time, shares of Enthusiast Gaming were up 2.9 per cent to $0.18.

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