GameSquare Esports Inc is riding good momentum after revealing preliminary revenue figures for its fiscal 4Q, Canaccord Genuity (TSX:CF, LSE:CF) analysts said.
In a recent note, Canaccord wrote that that the esports firm’s stated 4Q revenue of $7.5 million is ahead of estimates and implies a threefold quarter-over-quarter increase.
Previously, management indicated that it had generated $3.5 million as of the end of October or two out of four months in the stub quarter as GameSquare shifts from a November (year end) to a December (year-end),” analysts wrote.
READ: GameSquare Esports updates its impressive revenue guidance for 4Q 2021 to around $7.5M
The new revenue guidance for 4Q is also ahead of the $7 million pace that GameSquare’s most recent update implied, driven by acquisitions and organic factors, according to Canaccord.
“Recent acquisitions have a full contribution to 4Q: GameSquare acquired Complexity Gaming and Cut+Sew mid-year with two months and a single month contribution to 3Q, respectively,” the firm added. “As well, management has reported benefits from the streamlining of sales processes, the addition of TimTheTatman to the Complexity roster and a significant deal with Bagel Bites/Kraft Heinz.”
GameSquare is keeping its full year 2022 revenue guidance at $28 million, a figure which Canaccord feels is “achievable.”
“GameSquare shares appear to have stabilized, and we see an opportunity for multiple expansion as investors better understand the company’s positioning relative to industry tailwinds,” the analysts wrote.
Canaccord is reiterating a Speculative Buy rating on the stock and its $0.60 price target. Shares of GameSquare closed at $0.23 Tuesday on the Canadian Securities Exchange.
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