Golden Nugget Online Stock Soars as Analyst Sees Double Potential
Golden Nugget Online Gaming (NASDAQ:GNOG) gunstock is soaring Tues after a Wall Street analyst said the shares could double.
In midday trading, the online casino operator is higher by 13.70 percent — easy enough to make up it one of the best-performing gaming equities today. Jefferies psychoanalyst Saint David Katz initiating insurance coverage of GNOG with a “buy” is the spark behind the rally. The psychoanalyst tags the iGamng strong with a $28 damage point — more than two-fold where the stockpile shut on Apr 5.
The magnitude and productivity prospects of the iGaming market place have not been full apprehended past the Street, inwards our view, and GNOG’s positioning and mathematical product strength experience been proven in New Jersey,” writes Katz inward a take note to clients.
GNOG, which is controlled past Tilman Fertitta, went public utmost December next a merger with a special design acquisition keep company (SPAC) co-owned by the billionaire businessman Jefferies. GNOG buy in is away 30 percent year-to-date, connection a slew of other companies that came to market through and through blank-check transactions to the downside.
Even with those struggles, analysts are mostly bullish on the name, as highlighted by a consensus terms calculate of $24. The $28 sound projection offered upwards past Jefferies’ Katz is one of the highest GNOG calls on the street.
For GNOG Stock, Patience Required
As is the pillowcase with so many rising ontogenesis industries, iGaming is a long-term thought – I that demands investors exercising patience. Katz points out as practically in telling to GNOG stock.
“GNOG and digital gaming — iGaming, specifically — require long-term visual sensation in general. We trust GNOG’s carrying into action through and through 2020 provides a framework for low-pitched double-digit iGaming securities industry share, profitability, and 100-plus percent potency upside,” said the analyst.
With more states turn to online casinos and sports wagering to bolster revenue, it’s non tough to happen cop calls from Wall Street analysts. For example, Goldman Sachs recently said it believes cyberspace gaming testament live a $14 1000000000 manufacture inwards 2033, upward from $1.5 one million million today.
Part of the investiture community’s enthusiasm for cyberspace gambling and online sports betting is margins. Those web-based businesses habituate less staff and don’t need to put inward large, costly, brick-and-mortar buildings. In fact, Katz sees a ameliorate long-term opportunity with iGaming margins than with sports betting — a trait that bodes fountainhead for Golden Nugget Online.
Getting to $28
Obviously, it takes a lot for any stock to double. But GNOG has some favourable fundamentals, including telling marketplace part in the marquee New Jersey market place and a strong start up inwards Michigan.
Those factors and others suggest a go to $28 for GNOG buy in isn’t out of the realm of possibility.
Katz’s forecast is based on “1) initiative value/2023 estimated revenue of 8.25X is appropriate precondition leaders inwards US digital gaming 12X+, 2) Legalized tot up addressable market place of $19 billion/eight percent to 10 percent market share/30 percent margin/13.5X earnings before interest, taxes, depreciation and amortization (EBITDA)/12 percent weighted average be of working capital (WACC), which results inwards $30, 3) Multi-stage DCF to 2033, which yields a economic value of $26, which comprises a tot up blended valuation of $28.”
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