The esports boom is helping several gaming businesses rake in cash. Thankfully, many of these companies are publicly traded. This provides investors an opportunity to participate.
If you have observed the esports phenomenon from the sidelines, or if you have only dabbled in esports stocks, the time has come to up the ante. It is becoming increasingly clear with each passing day that esports is not a fad. Esports may even supplant traditional sports in terms of both popularity and revenue at some point in the future.
These three esports stocks are poised to reach new heights in the months ahead: Activision Blizzard (ATVI), Take-Two Interactive Software (TTWO), and Logitech International (LOGI).
Activision Blizzard (ATVI)
Chances are you have heard of at least one ATVI title. The company is behind popular games such as Overwatch, Call of Duty, and Starcraft. ATVI is also a power player in the esports industry. In fact, the company has a great chance of raking in more cash from this billion-dollar industry than any other publicly-traded company.
In our proprietary POWR Ratings, the stock has a “B” grade in the Buy & Hold Grade component. ATVI is also ranked fifth out of 15 stocks in the Entertainment – Toys & Video Games industry. Out of the 18 analysts who cover ATVI, 17 rate it as a “Buy,” one has it as a “Hold,” and zero advise selling.
The average analyst price target for ATVI is $99.44, indicating the stock has a potential 25.11% upside. The plain truth is that the second wave of the virus will steer that many more people toward gaming, helping ATVI sell an abundance of games and spike interest in the esports segment.
Take-Two Interactive Software (TTWO)
TTWO makes some of the most popular games in the history of the industry. Even if you are not in your teens or 20s, chances are you know someone who plays Grand Theft Auto, BioShock, Borderlands, Civilization, or NBA 2K. Though TTWO does not develop or publish as many titles as other power players in the gaming industry, the company’s limited offerings are surefire winners year-in and year-out.
TTWO is also a POWR Ratings success story, landing “A” grades in the Buy & Hold Grade and Trade Grade components, along with a “B” Peer Grade. TTWO is ranked first out of 15 stocks in the Entertainment – Toys & Video Games industry. Out of 13 analysts who cover TTWO, 12 of them recommending it as a “Buy,” one rates it a “Hold,” and none advising “Sell.”
TTWO has soared following the pandemic, mainly because many more people buy the company’s games and spend on in-game purchases. TTWO recurring in-game spending is up more than 40% on a year-over-year basis. Furthermore, TTWO is hiking prices on its titles for the newest Sony PlayStation and Microsoft Xbox consoles, adding even more money to its coffers.
Logitech International (LOGI)
LOGI has relationships with all the top esports teams. Furthermore, LOGI makes the devices esports players use to win their competitions. These peripherals will continue to sell like gangbusters in the years and decades ahead. LOGI also makes and sells devices for in-home entertainment, music, the internet, and PC navigation.
The POWR Ratings show LOGI has an “A” grade in the Trade Grade component and “B” grades in the Industry Rank and Buy & Hold Grade components. LOGI is ranked 12th out of 30 stocks in the Technology – Hardware industry. Of the dozen analysts who cover LOGI, nine rate it as a “Buy,” three rate it as “Hold,” and none advise selling. Analysts have also set an average price target of $100.28, indicating a potential 11% upside.
LOGI has doubled since the beginning of the pandemic as many people have turned to gaming and computers for fun while they stay at home. LOGI’s year-over-year sales have spiked by 75%. Furthermore, LOGI’s brass is working on developing new categories and products while simultaneously boosting production capacity.
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ATVI shares were trading at $79.62 per share on Thursday morning, up $0.47 (+0.59%). Year-to-date, ATVI has gained 34.88%, versus a 15.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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