10 Best Esports Stocks to Buy Now
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In this article, we discuss 10 best esports stocks to buy now. You can skip our detailed analysis of esports companies and the outlook of the sector, and go directly to read 5 Best Esports Stocks to Buy Now.
Esports refers to competitive video gaming, where professional players and teams compete in various video games for prizes and recognition. In the US, the esports sector encompasses a wide range of activities, including professional leagues, tournaments, team organizations, player contracts, and sponsorships. The sector has seen significant growth and popularity in recent years. Bloomberg mentioned Grand View Research’s data and highlighted that the esports market is expected to grow at a CAGR of 21.9% from 2022 to 2030, reaching $12.5 billion by 2030. The report also mentioned that the sports technology market, which refers to innovation in the field of sports, is estimated to be valued at $55.14 billion by 2023.
The esports industry falls within the gaming sector, which also encompasses video game development, publishing, and streaming platforms. Over the past decade, the gaming industry has seen tremendous expansion and has become a mainstream form of entertainment. The advancements in technology, increased accessibility, and the rise of online gaming have all contributed to the expansion of the market. In our article titled 10 Biggest Gaming Companies in the World by Revenue, we reported that the gaming industry has gained 500 million players in the last three years, reaching a global total of $2.7 billion. We also mentioned Accenture’s data that revealed by the end of 2023, 400 million new players are expected to join.
Also read: 11 Most Profitable Gaming Stocks Now
Esports generated significant buzz in recent years with events like the League of Legends World Championships, which attracted a similar number of viewers as the Super Bowl in 2019. Additionally, young gamers between the ages of 18 and 25 watch esports 34% more than traditional sports, as reported by CNBC. In addition to this, competitive esports and their increasing popularity captured the attention of the International Olympic Committee (IOC) as it made the significant decision to formally acknowledge eSports as a legitimate sport in 2017. Recently, the first-ever Esports Week organized by the Olympic committee commenced in Singapore, marking a significant milestone.
Major companies in the US have become increasingly involved in esports due to the sector’s growing commercial potential. Tech giants like NVIDIA Corporation (NASDAQ:NVDA) and Intel Corporation (NASDAQ:INTC) have played significant roles in supporting esports. Intel has been a long-standing sponsor and provider of hardware for tournaments, while NVIDIA has contributed with its advanced graphics processing technology. Similarly, Alphabet Inc. (NASDAQ:GOOG)’s YouTube is a widely-used platform among gamers and esports enthusiasts for watching the latest League of Legends professional tournaments.
Considering this, we have compiled a list of some of the best esports stocks to buy.
Photo by Alex Haney on UnsplashOur Methodology:
For this list, we scanned Insider Monkey's database of 943 hedge funds as of the first quarter of 2023 and selected companies that either operate within the esports ecosystems or derive revenue from various aspects of esports. This includes revenue streams such as sponsorships, advertising, ticket sales, and partnerships. From the resultant list, we picked esports companies with the highest number of hedge fund investors.
10. Skillz Inc. (NYSE:SKLZ)
Number of Hedge Fund Holders: 10
Skillz Inc. (NYSE:SKLZ) is a Nevada-based company that operates a mobile gaming platform. The company provides technology that enables game developers to create and monetize competitive multiplayer games. It is one of the best esports stocks in addition to NVIDIA Corporation (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOG), and Intel Corporation (NASDAQ:INTC).
In the first quarter of 2023, Skillz Inc. (NYSE:SKLZ) reported revenue of $44.4 million and its gross profit came in at roughly $40 million. At the end of March 31, the company had over $415.3 million available in cash and cash equivalents, up from $362.5 million three months ago. Its total assets amounted to over $612 million.
In April, Stifel maintained a Buy rating on Skillz Inc. (NYSE:SKLZ) with a $1.25 price target, presenting a constructive outlook on the gaming sector.
At the end of Q1 2023, 10 hedge funds in Insider Monkey's database reported having stakes in Skillz Inc. (NYSE:SKLZ), the same as in the previous quarter. These stakes have a total value of over $22 million. With roughly 20 million shares, Wildcat Capital Management was the company's leading stakeholder in Q1.
9. SciPlay Corporation (NASDAQ:SCPL)
Number of Hedge Fund Holders: 21
SciPlay Corporation (NASDAQ:SCPL) is next on our list of the best esports stocks. It is an American leading developer and publisher of digital games on mobile and web platforms. The company mainly specializes in creating casino games played for entertainment purposes without real money wagering.
In May, Stifel raised its price target on SciPlay Corporation (NASDAQ:SCPL) to $19 and maintained an Overweight rating on the shares, highlighting the company's performance in the most recent quarter.
On May 18, Light & Wonder proposed acquiring the remaining 17% equity interest in SSciPlay Corporation (NASDAQ:SCPL) that it does not currently own. The proposed transaction would be an all-cash deal valued at $422 million, with Light & Wonder offering $20.00 per share. If the acquisition is successful, SciPlay would become a wholly-owned subsidiary of Light & Wonder.
In the first quarter of 2023, SciPlay Corporation (NASDAQ:SCPL) reported revenue of $186.4 million, which showed an 18% growth from the same period last year. The company's operating cash flow for the quarter came in at over $41.7 million, up from $36.6 million in the prior-year period.
As of the close of Q1 2023, 21 hedge funds in Insider Monkey's database held stakes in SciPlay Corporation (NASDAQ:SCPL), up from 21 in the previous quarter. These stakes have a total value of over $110 million.
8. Inspired Entertainment, Inc. (NASDAQ:INSE)
Number of Hedge Fund Holders: 22
Inspired Entertainment, Inc. (NASDAQ:INSE) provides technology-based gaming solutions and content for the global gaming industry. The company specializes in developing and operating virtual sports, interactive casino games, and server-based gaming systems.
Inspired Entertainment, Inc. (NASDAQ:INSE) generated revenue of $66 million in the first quarter of 2023, which saw a 9% growth from the same period last year. The company's operating cash flow for the quarter came in at $14.8 million, compared with $5.1 million in the prior-year period. Its gaming revenue also showed a 14.7% year-over-year growth at $27.4 million, which makes it one of the best esports stocks on our list.
On May 22, Inspired Entertainment, Inc. (NASDAQ:INSE) announced that it has secured a contract extension with Paddy Power, a prominent bookmaker with over 600 betting shops in the UK and Ireland. The agreement ensures that Inspired will continue supplying its Virtual Sports products to all of Paddy Power's retail locations in both countries for an extended period.
At the end of March 31, 22 hedge funds tracked by Insider Monkey owned stakes in Inspired Entertainment, Inc. (NASDAQ:INSE), compared with 24 a quarter earlier. The consolidated value of these stakes is over $102.8 million. 683 Capital Partners was the company's leading stakeholder in Q1 with roughly 2 million shares.
7. Genius Sports Limited (NYSE:GENI)
Number of Hedge Fund Holders: 22
Genius Sports Limited (NYSE:GENI) is a London-based company that specializes in providing data and technology solutions to the sports industry. They offer a range of services that help sports organizations, leagues, teams, and media outlets capture, manage, and analyze data for various purposes. It is among the best esports stocks on our list.
In May, Lake Street Capital initiated its coverage of Genius Sports Limited (NYSE:GENI) with a Buy rating and a $7 price target, appreciating the company's performance in its recent quarterly earnings.
Recently, Genius Sports Limited (NYSE:GENI) announced a significant expansion and extension of its exclusive data partnership with Football DataCo. As part of the agreement, Genius Sports will continue to be the sole provider of live data from the English Premier League, English Football League, and Scottish Professional Football League to the global sports betting industry.
In the first quarter of 2023, Genius Sports Limited (NYSE:GENI) posted revenue of $97.2 million, which was up 13.2% from the same period last year. The company had over $94.4 million available in cash and cash equivalents at the end of March 31.
The number of hedge funds tracked by Insider Monkey with stakes in Genius Sports Limited (NYSE:GENI) grew to 22 in Q1 2023, from 18 in the preceding quarter. These stakes are collectively worth over $76.6 million. Cathie Wood's ARK Investment Management was the company's largest stakeholder in Q1.
6. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 37
Roblox Corporation (NYSE:RBLX) is a California-based company that operates a popular online platform called Roblox. The platform allows users to create, share, and play games and virtual experiences. It is primarily known for its user-generated content, where players can design and build their own games, virtual worlds, and interactive experiences using the platform's tools and programming language.
In the first quarter of 2023, Roblox Corporation (NYSE:RBLX) reported bookings of $773.8 million and revenue of $655.3 million, up 22.6% and 22% from the same period last year, respectively. The company's operating cash flow for the quarter came in at over $173.8 million.
In addition to popular stocks like NVIDIA Corporation (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOG), and Intel Corporation (NASDAQ:INTC), Roblox Corporation (NYSE:RBLX) is also gaining attention as one of the best esports stocks.
Roblox Corporation (NYSE:RBLX) was a popular buy among hedge funds in Q1 2023, with 37 hedge fund positions, up from 29 in the previous quarter, as shown by Insider Monkey's data. The stakes owned by these hedge funds have a collective value of over $2.11 billion.
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Disclosure. None. 10 Best Esports Stocks to Buy Now is originally published on Insider Monkey.