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4 Stocks to Buy on COVID-Led E-Sports Uptick in 2021
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The coronavirus pandemic and the resultant stay-at-home trend has caused the postponement or cancellation of major sporting live games and temporary closure of venues, pushing consumers to indulge in video games or online watching of e-sports.
E-sports is an all-encompassing term used to describe online multiplayer video games played competitively for spectators and the many tournaments and events they spawn.
Over 50 video games across consoles and PC are considered to be part of a rapidly growing e-sports industry, with professionally organized leagues and tournaments offering millions of dollars in prize money for the best players.
With easing public gathering and travel guidelines and hopes of large-scale coronavirus vaccine availability in 2021, gaming publishers have been preparing and scheduling live events and tournaments for the upcoming year, boosting e-sports gaming industry’s near-term prospects.
Per a ResearchAndMarkets report, the global esports market is anticipated to reach $2.4 billion in 2024, at a CAGR of 18.19% for the period spanning 2020-2024.
E-sports Industry Well Poised for 2021
The growing opportunity in e-sports is grabbing the attention of marketers and platforms. Multiple revenue streams are connected to e-sports, including advertising, sponsorships, media rights, ticket sales to live events and merchandising.
Platforms such as e-sports betting and fantasy sites have attracted significant investments, which is driving the market. The global e-sports betting market size is projected to reach $18.4 billion by 2026 from $7.7 billion in 2019, at a CAGR of 13.67% during 2021-2026, per a Market Research report.
Moreover, while e-sports is currently a small part of the huge video-game industry, it is growing exponentially. North America, Western Europe, and the Asia-Pacific region are expected to be among the top e-sports markets in 2021.
Markedly, e-sports digital advertising in the United States is expected to further grow and reach $226 million by 2021 from $175 million generated in 2019, per a Statista report.
Furthermore, the e-sports industry is expected to benefit from huge revenues, attributed to player spending on in-game purchases, merchandising and ticket purchase for live events and tournaments, which have resumed following the ease in coronavirus-related public gathering guidelines.
According to a Newzoo report, by 2021, the eSports industry is expected to have a total of 250 million regular viewers and 307 million casual viewers.
Additionally, the blend of blockchain technology and gaming holds great promise for the e-sports industry. Blockchain provides a useful tool for gamers for various reasons including decentralized asset exchanges, verifiable scarcity of virtual objects and collectibles, fast and secure payment networks, and enables developers to properly monetize their creations.
Moreover, rising Internet penetration is driving demand. E-sports executives consistently cite Alphabet (GOOGL - Free Report) Google’s YouTube and Amazon’s (AMZN - Free Report) Twitch, which tend to garner younger audiences, as the leading platforms for e-sports viewing in the United States.
Demographically, the 21-25 age group accounts for the majority of e-sports enthusiasts in Europe, with the 18-20 group making up just 33% of that total. Further, as restrictions are lifted in 2021, the number of Twitch viewers in the United States is also expected to increase by 5.9% to 44 million.
Our Picks
Given the surge in sales and upbeat sentiment in the e-sports gaming industry, investors can tap the following stocks as these are well poised to beat the coronavirus-related headwinds in 2021 on strong fundamentals. Notably, all these four stocks have outperformed the S&P 500 composite on a year-to-date basis.
Year-to-Date Performance
Equipment Makers
Turtle Beach (HEAR - Free Report) is a leading designer of headsets for gamers. The company’s products have hit a new wave of growth due to the success of battle royale shooter Fortnite, which has surpassed 355 million users worldwide. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the Zacks Consensus estimate for fourth quarter 2020 earnings has moved up 31.8% to 58 cents per share over the past 60 days.
Nvidia (NVDA - Free Report) makes high-end GPUs that are marketed for PC gamers and are the top choice of professional gamers. The exponential rise of e-sports promises to generate even more interests in its GPUs. The stock carries a Zacks Rank #2 (Buy).
Notably, the Zacks Consensus estimate for fourth quarter fiscal 2021 earnings has moved up 9.4% to $2.8 per share over the past 60 days.
Video Game Publishers
Boyd Gaming Corporation (BYD - Free Report) along with FanDuel Group has rolled out mobile sports betting platforms in Illinois and Iowa, thereby expanding its reach to more than 30 million users nationwide. This Zacks Rank #2 company intends to capitalize on the growth opportunity with interactive gaming and mobile sports betting.
Markedly, the Zacks Consensus estimate for fourth-quarter 2020 earnings has moved up 206.3% to 49 cents per share over the past 60 days.
Activision Blizzard has become a dominant name in the e-sports space, courtesy of its massively successful Overwatch League. Markedly, Overwatch League Grand Finals pulled in 120K concurrent views on YouTube. This Zacks Rank #2 company is also enjoying the success of another e-sports league based on its hugely popular franchise Call of Duty.
Notably, the Zacks Consensus estimate for fourth-quarter 2020 earnings has moved up 10.4% to $1.17 per share over the past 60 days.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
4 Stocks to Buy on COVID-Led E-Sports Uptick in 2021
The coronavirus pandemic and the resultant stay-at-home trend has caused the postponement or cancellation of major sporting live games and temporary closure of venues, pushing consumers to indulge in video games or online watching of e-sports.
E-sports is an all-encompassing term used to describe online multiplayer video games played competitively for spectators and the many tournaments and events they spawn.
Over 50 video games across consoles and PC are considered to be part of a rapidly growing e-sports industry, with professionally organized leagues and tournaments offering millions of dollars in prize money for the best players.
With easing public gathering and travel guidelines and hopes of large-scale coronavirus vaccine availability in 2021, gaming publishers have been preparing and scheduling live events and tournaments for the upcoming year, boosting e-sports gaming industry’s near-term prospects.
Per a ResearchAndMarkets report, the global esports market is anticipated to reach $2.4 billion in 2024, at a CAGR of 18.19% for the period spanning 2020-2024.
E-sports Industry Well Poised for 2021
The growing opportunity in e-sports is grabbing the attention of marketers and platforms. Multiple revenue streams are connected to e-sports, including advertising, sponsorships, media rights, ticket sales to live events and merchandising.
Platforms such as e-sports betting and fantasy sites have attracted significant investments, which is driving the market. The global e-sports betting market size is projected to reach $18.4 billion by 2026 from $7.7 billion in 2019, at a CAGR of 13.67% during 2021-2026, per a Market Research report.
Moreover, while e-sports is currently a small part of the huge video-game industry, it is growing exponentially. North America, Western Europe, and the Asia-Pacific region are expected to be among the top e-sports markets in 2021.
Markedly, e-sports digital advertising in the United States is expected to further grow and reach $226 million by 2021 from $175 million generated in 2019, per a Statista report.
Furthermore, the e-sports industry is expected to benefit from huge revenues, attributed to player spending on in-game purchases, merchandising and ticket purchase for live events and tournaments, which have resumed following the ease in coronavirus-related public gathering guidelines.
According to a Newzoo report, by 2021, the eSports industry is expected to have a total of 250 million regular viewers and 307 million casual viewers.
Additionally, the blend of blockchain technology and gaming holds great promise for the e-sports industry. Blockchain provides a useful tool for gamers for various reasons including decentralized asset exchanges, verifiable scarcity of virtual objects and collectibles, fast and secure payment networks, and enables developers to properly monetize their creations.
Moreover, rising Internet penetration is driving demand. E-sports executives consistently cite Alphabet (GOOGL - Free Report) Google’s YouTube and Amazon’s (AMZN - Free Report) Twitch, which tend to garner younger audiences, as the leading platforms for e-sports viewing in the United States.
Demographically, the 21-25 age group accounts for the majority of e-sports enthusiasts in Europe, with the 18-20 group making up just 33% of that total. Further, as restrictions are lifted in 2021, the number of Twitch viewers in the United States is also expected to increase by 5.9% to 44 million.
Our Picks
Given the surge in sales and upbeat sentiment in the e-sports gaming industry, investors can tap the following stocks as these are well poised to beat the coronavirus-related headwinds in 2021 on strong fundamentals. Notably, all these four stocks have outperformed the S&P 500 composite on a year-to-date basis.
Year-to-Date Performance
Equipment Makers
Turtle Beach (HEAR - Free Report) is a leading designer of headsets for gamers. The company’s products have hit a new wave of growth due to the success of battle royale shooter Fortnite, which has surpassed 355 million users worldwide. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the Zacks Consensus estimate for fourth quarter 2020 earnings has moved up 31.8% to 58 cents per share over the past 60 days.
Nvidia (NVDA - Free Report) makes high-end GPUs that are marketed for PC gamers and are the top choice of professional gamers. The exponential rise of e-sports promises to generate even more interests in its GPUs. The stock carries a Zacks Rank #2 (Buy).
Notably, the Zacks Consensus estimate for fourth quarter fiscal 2021 earnings has moved up 9.4% to $2.8 per share over the past 60 days.
Video Game Publishers
Boyd Gaming Corporation (BYD - Free Report) along with FanDuel Group has rolled out mobile sports betting platforms in Illinois and Iowa, thereby expanding its reach to more than 30 million users nationwide. This Zacks Rank #2 company intends to capitalize on the growth opportunity with interactive gaming and mobile sports betting.
Markedly, the Zacks Consensus estimate for fourth-quarter 2020 earnings has moved up 206.3% to 49 cents per share over the past 60 days.
Activision Blizzard has become a dominant name in the e-sports space, courtesy of its massively successful Overwatch League. Markedly, Overwatch League Grand Finals pulled in 120K concurrent views on YouTube. This Zacks Rank #2 company is also enjoying the success of another e-sports league based on its hugely popular franchise Call of Duty.
Notably, the Zacks Consensus estimate for fourth-quarter 2020 earnings has moved up 10.4% to $1.17 per share over the past 60 days.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>