Why Bragg Gaming Stock Jumped 13% and Enthusiast Gaming Fell 14% on Tuesday

These gaming stocks both moved in opposite directions today, with one announcing a new market entry and the other, earnings results.

Amy Legate-Wolfe

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Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Published March 29, 2022 2:30 pm EDT

| More on: EGLX.FBRAGEGLX

Gaming stocks had quite the day on Tuesday, with Bragg Gaming Group (TSX:BRAG) and Enthusiast Gaming Holdings (TSX:EGLX)(NASDAQ:EGLX) each moving in opposite directions. The former jumped 12%, while the latter fell by 14% as of writing.

gaming, tech — Image source: Getty Images

What happened?

Each of these gaming companies had their own results come in over the last few days. However, Bragg stock managed to follow up its strong results with news of more international deals. The company’s iGaming content is now live in the Bahamas. This comes just days after entering the Italian market as well.

Enthusiast Gaming stock, however, didn’t win over investors during its latest earnings results. While revenue soared 130% year over year for the year, and profit was up 102%, news of an internal shakeup likely sent shares downwards. The company’s president along with a board member announced their resignations.

So what?

On the surface, Enthusiast Gaming stock and Bragg Gaming stock both seem to be quite similar. The pair reported record-breaking results, with Bragg announcing its results about three weeks ago. However, growth wasn’t as insane as Enthusiast’s, which was a 14.4% increase in year-over-year revenue.

However, what it seems that Bragg has over Enthusiast is expansion. The company continues to expand throughout Europe, providing it with a diversified balance sheet. It now has a total addressable market of US$13.5 billion, according to its latest earnings results.

Now what?

Analysts weighed in on Enthusiast’s results, stating it still maintained substantial growth, even though it was in line with estimates. However, at least one analyst stated that the company isn’t likely to reach breakeven level for its EBITDA in 2022. However, this could be achieved by next year. This led to a downgrade of the stock’s target price.

Despite the downgrade, it’s still far above where Enthusiast trades today at $3.50. As for Bragg stock, analysts certainly have the Ontario market to look forward to as it enters the market next month. Meanwhile, it trades at $9.65 as of writing, only climbing higher with today’s news.

Shares of Bragg stock were up 13% as of writing, with Enthusiast stock down 9%.