PlayAGS (NYSE: AGS), a Las Vegas-based slot machine manufacturer, is making impressive strides in the gaming sector. The company’s shares have enjoyed a substantial increase of 30.37% year-to-date, positioning it as a strong contender among small-cap gaming equities.
A Promising Forecast
David Bain, a respected analyst from B. Riley, recently reiterated a “buy” rating on PlayAGS stock and set an ambitious $14 price target. This projection implies a potential doubling from the current closing price. Furthermore, Bain anticipates another earnings beat from PlayAGS, suggesting a further increase in its market share.
PlayAGS has consistently surpassed Wall Street’s EBITDA estimates, having done so for an impressive 12 consecutive quarters. This consistent performance not only enhances the company’s appeal to investors but also paints a promising picture of its future prospects.
Solid Performance and Future Prospects
As the company entered the second quarter, analysts noted solid visibility on client purchasing trends. Coupled with projections of high single-digit sales growth this year, there is a clear indication of a positive trajectory for the company. Its expansion into new product categories, such as high denomination offerings, is expected to further bolster its market position.
Despite its promising outlook, PlayAGS remains undervalued when compared to its peers. As the company continues to strengthen its financial position, this could change. Investors are eagerly awaiting the second-quarter earnings update, which could give crucial insights into the company’s deleveraging efforts. If the news is positive, it could trigger further growth for the stock.
In conclusion, PlayAGS presents a compelling investment opportunity. Approximately 70% of the company’s business model comprises recurring revenue and domestically installed slots. Its ongoing market share gains and strategic plans for financial improvement and leverage reduction make PlayAGS a potentially lucrative play for investors in the dynamic gaming industry.