Analyst Mike Hickey from Benchmark Co. maintained a Buy rating on PLAYSTUDIOS and keeping the price target at $2.00.
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Mike Hickey has given his Buy rating due to a combination of factors that highlight both the potential and the risks associated with PLAYSTUDIOS. The company has reported results that were slightly below expectations, with revenue and AEBITDA falling short of consensus estimates. Despite these challenges, management has maintained its full-year guidance, suggesting confidence in their strategic initiatives. The company’s focus on its loyalty-powered ecosystem, particularly through the playAWARDS platform, is seen as a key differentiator in the market.
However, the growth prospects for PLAYSTUDIOS are largely tied to two speculative initiatives: the sweepstakes and the Tetris Block Party. While the sweepstakes show promising early indicators, they face significant legal and competitive challenges. Similarly, the Tetris Block Party holds potential but comes with inherent risks associated with launching new mobile games. Despite these uncertainties, the valuation reflects a speculative buy, considering the potential upside if these initiatives succeed. The recommendation acknowledges the high-risk, high-reward nature of the company’s current position, with the understanding that successful execution could lead to substantial growth.
According to TipRanks, Hickey is a 5-star analyst with an average return of 6.0% and a 61.21% success rate. Hickey covers the Communication Services sector, focusing on stocks such as Electronic Arts, IMAX, and Marcus.