Hi there,
There is no doubt the legalization of sports betting and online gaming are going to be a boon for many companies. We've already seen the legalization of sports betting take place in certain states, and there are steps to make that happen here in Canada as well. E-gaming is also exploding, likely compounded by the pandemic.
Score Media & Gaming (SCR) and Enthusiast Gaming Holdings Inc (EGLX) are two that are often cited as benefiting. Of the two, EGLX looks more attractive for a number of reasons. First - the company is much cheaper than SCR across ALL metrics.
P/S = 11.69 vs 44.26
P/B = 3.14 vs 29.97
EV/Revenue = 12.45 vs 44.08
In fact, EGLX's valuation looks quite reasonable against the industry as a whole. Secondly, EGLX is expect to growth the top line at a triple digit pace in fiscal 2021 (+121%) vs only 54% for SCR. There is a difference in business models. EGLX is more of an e-gaming pureplay while SCR is more of a sports media business with sports betting.
Third, the Score has a spotty history while EGLX, despite being a newer issue, has exploded and seen incredible growth. On a TTM basis, it has generated ~$39M in revenue, far outpacing the Score which has only generated $20M and actually down 33% YOY. The reason why the Score gets most attention is because it is a more widely known sports company.
What you have here is two different stocks, trading at much different ranges each poised to take advantage of slightly different tailwinds. Online sports betting and e-gaming are both expected to see considerable rise in interest and both of these are likely to benefit. However, if I were to chose one today - I'd go with EGLX because of relative valuation and expected growth rates.
Mat