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Enthusiast Gaming Holdings (TSE:EGLX)
TSX:EGLX

Enthusiast Gaming Holdings (EGLX) AI Stock Analysis

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Enthusiast Gaming Holdings

(TSX:EGLX)

Rating:40Underperform
Price Target:
C$0.00
▼(-100.00%Downside)
The overall score is primarily impacted by significant financial challenges, with declining revenue and negative profitability metrics posing major risks. Weak technical indicators and unfavorable valuation metrics further contribute to a negative outlook. While strategic corporate events show promise, they are insufficient to offset the financial and technical weaknesses.
Positive Factors
Financial Stability
The company’s balance sheet has been meaningfully improved after completing a C$20.0M debt financing, providing stability as the business moves forward.
Profitability Potential
The business has reached an inflection point and should generate revenue growth and quarterly profitability moving forward.
Revenue Growth
The company demonstrated its ability to grow revenue sequentially and generate positive adjusted EBITDA in the quarter, representing an important inflection point.
Negative Factors
Revenue Decline
The reported 3Q24 revenue of C$16.7M represented a 63.2% decline from year ago levels, indicating a significant drop in revenue.
Revenue Shortfall
The company reported 2Q24 revenue of C$14.7M, below the C$24.2M estimate and C$23.6M for the Street, representing a 65.5% decline from year ago levels.

Enthusiast Gaming Holdings (EGLX) vs. iShares MSCI Canada ETF (EWC)

Enthusiast Gaming Holdings Business Overview & Revenue Model

Company DescriptionEnthusiast Gaming Holdings Inc. engages in the media, content, entertainment, and esports businesses the United States, Canada, and internationally. The company operates an online network of approximately 100 gaming related websites; owns and operates Enthusiast Gaming Live Expo, a video-gaming expo; provides management and support services to players involved in professional gaming; owns and manages esports teams for various games comprising Call of Duty, Madden NFL, Fortnite, Overwatch, Super Smash Bros., Rocket League, and Valorant; and produces and programs approximately 30 weekly shows across AVOD and OTT channels, and represents approximately 500 gaming influencers on YouTube and Twitch. It also operates Luminosity Gaming, an eSports franchise; and hosts B2B and consumer mobile gaming events. The company was incorporated in 2018 and is headquartered in Toronto, Canada.
How the Company Makes MoneyEnthusiast Gaming Holdings Inc. generates revenue through multiple streams within the gaming and esports industry. The primary revenue sources include advertising, subscriptions, and events. The company monetizes its extensive network of gaming websites and YouTube channels through digital advertising, leveraging its large audience base to attract advertisers targeting the gaming demographic. Additionally, Enthusiast Gaming offers premium subscriptions for exclusive content and ad-free experiences on its platforms. The company also hosts gaming and esports events, both online and in-person, which generate revenue through ticket sales, sponsorships, and partnerships with brands looking to reach a highly engaged audience. Key partnerships with esports teams and gaming influencers further enhance Enthusiast Gaming's ability to expand its reach and revenue potential.

Enthusiast Gaming Holdings Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q4-2024)
|
% Change Since: -37.50%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition, with significant improvements in profitability and cost management despite a notable decline in revenue. Key assets and partnerships show promising performance, but challenges such as revenue decline, program sunsetting, and debt covenant compliance issues remain. Overall, the company's strategic focus on high-margin growth and audience expansion presents a balanced outlook.
Q4-2024 Updates
Positive Updates
Significant Improvement in Adjusted EBITDA
Adjusted EBITDA improved meaningfully in Q4 2024, coming in at $1.9 million compared to a loss of $3 million in Q4 2023, marking a $4.9 million swing toward profitability.
Increase in Gross Margin
Gross margin increased significantly to 76% in Q4 2024, up from 40% in Q4 2023, highlighting the strength of core owned and operated assets and focused monetization strategies.
Cost Structure Improvements
Operating expenses saw a significant reduction with cash-based quarterly OpEx down by over $10 million year-over-year in Q4, reflecting disciplined cost management.
Strong Performance from Key Assets
Assets such as The Sims Resource, Icy Veins, and U.GG showed strong performance, with increased subscribers and expansion into new game titles driving growth.
Expansion of Events and Partnerships
PocketGamer Connects set new records with flagship events and is expanding to new locations in 2025. Partnership with Playwire is delivering higher yields with lower costs.
Negative Updates
Revenue Decline
Revenue for Q4 2024 was $17.8 million, down from $47.1 million in Q4 2023, primarily due to the deprioritization of low-margin network revenues.
Challenges with NFL TNG Program
The company decided to sunset the NFL Tuesday Night Gaming program due to high costs and the need for significant sponsorship commitments.
Debt Covenant Compliance Issues
The company was not in compliance with certain covenants under its credit facility, requiring amendments and negotiations with lenders.
Decrease in Paid Subscribers
Paid subscribers were down to 238,000 as of December 31, 2024, from 268,000 as of December 31, 2023, primarily due to the sale of legacy assets.
Company Guidance
During the Enthusiast Gaming Holdings Fourth Quarter 2024 Financial Results Conference Call, the company reported several key metrics. Enthusiast Gaming achieved an adjusted EBITDA of $1.9 million in Q4 2024, marking a $4.9 million improvement from a $3 million loss in Q4 2023. Revenue for Q4 2024 was reported at $17.8 million, down from $47.1 million in the same quarter of 2023, largely due to the strategic deprioritization of low-margin video network segments. However, gross margins significantly increased to 76% from 40% in Q4 2023, indicating a more profitable revenue mix. Operating expenses were sharply reduced, with cash-based quarterly OpEx down by over $10 million year-over-year in Q4. On a full-year basis, revenue for 2024 was $73 million, down from $178 million in 2023, but adjusted EBITDA improved significantly, reducing the loss from $13 million in 2023 to just $153,000 in 2024. Looking forward to 2025, the company expects gross margins to remain strong and is focusing on audience expansion and efficient monetization strategies, leveraging partnerships and increased yields from programmatic revenue streams.

Enthusiast Gaming Holdings Financial Statement Overview

Summary
Enthusiast Gaming Holdings is facing significant financial challenges, with declining revenues and persistent losses impacting profitability. The high debt-to-equity ratio and negative cash flow position further underscore the need for strategic financial restructuring.
Income Statement
30
Negative
Enthusiast Gaming Holdings has struggled with consistent revenue and profit growth. The latest annual report shows a significant decline in total revenue from $178M to $72M, indicating a negative growth trajectory. The company also reports persistent net losses, with a net profit margin of -132.3% this year. The gross profit margin remains relatively healthy at 67.7%, but negative EBIT and EBITDA margins reflect operational challenges.
Balance Sheet
40
Negative
The balance sheet reveals a fairly high debt-to-equity ratio of 0.77, indicating a sizable reliance on debt financing. The equity ratio stands at 40.3%, suggesting moderate financial stability. However, the declining total assets and stockholders' equity over the years raise concerns about long-term solvency.
Cash Flow
35
Negative
Cash flow analysis shows negative free cash flow growth, and the company continues to experience challenges in generating positive operating cash flow. The operating cash flow to net income ratio is negative, highlighting cash flow inefficiencies. Despite positive financing cash flow, overall cash flow management appears weak.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
72.57M178.18M202.84M167.36M72.76M
Gross Profit
49.13M67.42M63.47M37.77M18.46M
EBIT
-3.20M-24.65M-47.78M-49.62M-17.07M
EBITDA
-3.20M-32.15M-58.55M-40.62M-14.60M
Net Income Common Stockholders
-95.98M-117.67M-76.83M-52.05M-26.85M
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.77M6.85M7.54M22.79M4.45M
Total Assets
128.45M242.41M341.44M387.78M222.32M
Total Debt
40.01M23.72M19.94M12.84M38.89M
Net Debt
35.25M16.87M12.52M-9.81M34.57M
Total Liabilities
76.70M93.42M86.79M125.01M80.45M
Stockholders Equity
51.75M142.72M254.65M262.77M141.87M
Cash FlowFree Cash Flow
-19.93M-2.86M-26.65M-23.68M-15.30M
Operating Cash Flow
-19.75M-2.84M-26.64M-23.68M-15.29M
Investing Cash Flow
3.85M-767.27K4.31M-33.94M-12.17M
Financing Cash Flow
13.34M3.09M6.50M76.01M18.59M

Enthusiast Gaming Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.05
Price Trends
50DMA
0.06
Negative
100DMA
0.09
Negative
200DMA
0.12
Negative
Market Momentum
MACD
>-0.01
Positive
RSI
40.49
Neutral
STOCH
<0.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EGLX, the sentiment is Negative. The current price of 0.05 is below the 20-day moving average (MA) of 0.06, below the 50-day MA of 0.06, and below the 200-day MA of 0.12, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.49 is Neutral, neither overbought nor oversold. The STOCH value of <0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:EGLX.

Enthusiast Gaming Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$14.64B5.81-3.99%6.03%2.71%-31.56%
40
Underperform
$7.96M-105.94%-61.29%12.95%
$15.31M-175.54%
$80.29M5.9982.67%
$25.21M9.73-6.91%
48
Neutral
C$51.19M-49.83%-58.70%-711.28%
TSOAM
48
Neutral
C$32.73M277.780.17%59.77%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:EGLX
Enthusiast Gaming Holdings
0.05
-0.09
-62.96%
QYOUF
QYOU Media
0.03
0.00
0.00%
ZMDTF
Zoomd Technologies
0.77
0.69
862.50%
EAGRF
Leaf Mobile Inc
0.30
-0.29
-49.15%
TSE:BRMI
Boat Rocker Media
0.90
0.10
12.50%
TSE:OAM
OverActive Media Corp
0.25
0.01
4.17%

Enthusiast Gaming Holdings Corporate Events

Business Operations and Strategy
Enthusiast Gaming Expands Global Reach Through Partnership with Mediacube
Positive
May 22, 2025

Enthusiast Gaming has announced a strategic partnership with Mediacube, a global leader in content monetization, to expand its advertising reach across a vast network of YouTube creators. This collaboration significantly increases Enthusiast Gaming’s media inventory, allowing it to offer brands enhanced access to Gen Z and Millennial audiences through premium, brand-safe advertising opportunities. The partnership also provides Enthusiast Gaming’s creator network with access to Mediacube’s advanced monetization tools, further amplifying the company’s market presence and operational capabilities.

The most recent analyst rating on (TSE:EGLX) stock is a Hold with a C$0.15 price target. To see the full list of analyst forecasts on Enthusiast Gaming Holdings stock, see the TSE:EGLX Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Enthusiast Gaming Reports Strategic Growth Amidst Q1 2025 Financial Results
Positive
May 15, 2025

Enthusiast Gaming Holdings Inc. reported its Q1 2025 financial results, highlighting strategic expansions and product innovations that have expanded its reach. Despite a decrease in revenue to $12.2 million due to the deprioritization of low-margin video platform revenue, the company achieved a gross margin of 74.3%, up from 60.3% in the previous year. The company has focused on a leaner structure, reducing operating expenses and enhancing profitability through strategic ad tech optimizations and subscriber growth. The company’s platforms, such as Icy Veins and The Sims Resource, have shown significant engagement and subscriber growth, while direct sales have been rebuilt to support future growth.

The most recent analyst rating on (TSE:EGLX) stock is a Hold with a C$0.15 price target. To see the full list of analyst forecasts on Enthusiast Gaming Holdings stock, see the TSE:EGLX Stock Forecast page.

Financial Disclosures
Enthusiast Gaming to Release Q1 2025 Financial Results
Neutral
May 12, 2025

Enthusiast Gaming Holdings Inc. is set to announce its first quarter 2025 financial and operating results on May 15, 2025. The announcement is expected to provide insights into the company’s performance and its continued growth in the gaming and esports industry, potentially impacting stakeholders and market positioning.

The most recent analyst rating on (TSE:EGLX) stock is a Hold with a C$0.1500 price target. To see the full list of analyst forecasts on Enthusiast Gaming Holdings stock, see the TSE:EGLX Stock Forecast page.

Product-Related AnnouncementsBusiness Operations and Strategy
Enthusiast Gaming Expands U.GG to Rainbow Six Siege
Positive
May 1, 2025

Enthusiast Gaming has expanded its U.GG analytics platform to support Rainbow Six Siege, aligning with the game’s upcoming Siege X platform update. This strategic move enhances Enthusiast’s presence in the gaming industry by providing high-quality tools and insights to a revitalized player base, while Luminosity Gaming continues to compete in the Rainbow Six North American Pro League, reinforcing the company’s commitment to competitive gaming.

Business Operations and Strategy
Enthusiast Gaming’s Rising Stars 2025 Breaks Records with Collaborative Finale
Positive
Apr 24, 2025

Enthusiast Gaming’s Luminosity Gaming successfully concluded its Rising Stars 2025 creator competition, which attracted over 5,800 entrants and generated 500 million impressions, marking a record-breaking season. The competition’s finale saw three creators, BillyGoat, CozyZozie, and BPala, share the grand prize, reflecting the collaborative spirit of the event. This achievement highlights Luminosity’s growing influence in the creator economy and its ability to engage a highly active audience, offering significant brand-building opportunities for its partners.

Product-Related AnnouncementsBusiness Operations and Strategy
Enthusiast Gaming Expands U.GG Platform to Marvel Rivals
Positive
Apr 8, 2025

Enthusiast Gaming Holdings Inc. has expanded its data and analytics platform, U.GG, to include support for Marvel Rivals, a popular team-based PvP game. This move leverages the game’s growing popularity and Enthusiast Gaming’s expertise in providing performance-enhancing tools, aiming to deepen player engagement and community building. The expansion also involves Luminosity, Enthusiast’s esports brand, which is actively participating in Marvel Rivals competitions in North America and Europe. This strategic initiative reflects Enthusiast Gaming’s commitment to enhancing fan engagement and building dedicated user communities, further solidifying its position in the gaming industry.

Business Operations and StrategyFinancial Disclosures
Enthusiast Gaming Achieves Financial Milestones and Subscriber Growth in 2024
Positive
Mar 31, 2025

Enthusiast Gaming reported significant financial improvements in Q4 and FY 2024, with a notable increase in adjusted EBITDA and gross margins due to strategic realignment towards high-margin revenue streams. The company emphasized audience expansion and engagement, achieving record subscriber growth and increased platform engagement, driven by popular gaming properties and strategic sales initiatives.

Financial Disclosures
Enthusiast Gaming to Release Q4 and Year-End 2024 Results
Neutral
Mar 26, 2025

Enthusiast Gaming Holdings Inc. is set to announce its financial and operating results for the fourth quarter and year-end 2024 on March 31, 2025. The announcement will be followed by a conference call and webcast, providing stakeholders with insights into the company’s performance and strategic direction.

Product-Related AnnouncementsBusiness Operations and Strategy
Enthusiast Gaming’s Addicting Games Enhances Developer Analytics with ByteBrew Partnership
Positive
Mar 20, 2025

Enthusiast Gaming’s Addicting Games has partnered with ByteBrew to enhance analytics for web game developers. This collaboration aims to provide developers with real-time analytics, monetization tracking, and user acquisition insights, thereby supporting indie and web-based developers in improving game success and exploring new revenue streams.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.