Allied Gaming & Entertainment Inc. (NASDAQ: AGAE)

Sector: Communication Services Industry: Entertainment CIK: 0001708341
Market Cap 16.58 Mn
P/B 0.32
P/E -0.75
P/S 2.09
ROIC (Qtr) -34.51
Div Yield % 0.00
Rev 1y % (Qtr) -14.63
Total Debt (Qtr) 39.56 Mn
Debt/Equity (Qtr) 0.76

About

Allied Gaming & Entertainment Inc., often recognized by its acronym AGAE, is a prominent player in the entertainment industry, specifically focusing on experiential entertainment. The company's operations align with the burgeoning market of gaming, which has rapidly grown to become one of the largest and fastest-growing sectors. As of 2023, the global gaming industry was valued at $187.7 billion and is projected to grow at a compound annual growth rate (CAGR) of 2.6% between 2023 and 2024. AGAE's primary business activities encompass in-person...

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Price action

Investment thesis

Bull case

  • Tangible assets of 95.18M provide exceptional 314.72x coverage of deferred revenue 302429, showing strong service capability backing.
  • Short-term investments of 64.93M provide solid 25.15x coverage of other current liabilities 2.58M, indicating strong liquidity.
  • Tangible assets of 95.18M provide robust 36.88x coverage of other current liabilities 2.58M, indicating strong asset backing.
  • Long-term investments of 3.41M provide solid 1.23x coverage of long-term debt 2.76M, indicating strategic financial planning.
  • R&D investment of 861306 represents healthy 2.85x of deferred revenue 302429, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of (210554) barely covers its investment activities of 7.54M, with a coverage ratio of -0.03, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 15.45M provide limited coverage of acquisition spending of (5.45M), which is -2.83x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (210554) provides insufficient coverage of deferred revenue obligations of 302429, which is -0.70x, raising concerns about future service delivery capabilities.
  • Short-term investments of 64.93M significantly exceed cash reserves of 15.45M, which is 4.20x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (210554) shows concerning coverage of stock compensation expenses of 690064, with a -0.31 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.32 1.53
EV to Cash from Ops. EV/CFO -162.88 25.10
EV to Debt EV to Debt 0.87 5.03
EV to EBIT EV/EBIT -1.54 165.24
EV to EBITDA EV/EBITDA -1.14 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF -8.06 72.07
EV to Market Cap EV to Market Cap 2.07 2.12
EV to Revenue EV/Rev 4.32 6.42
Price to Book Value [P/B] P/B 0.32 2.40
Price to Earnings [P/E] P/E -0.75 -114.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.73
Interest Coverage Int. cover (Qtr) 0.00 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,216.42 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 40.53 248.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -112.66 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -262.12 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) -106.96 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) -106.96 24.10
EPS Growth (1y) % EPS 1y % (Qtr) -111.54 18.31
FCF Growth (1y) % FCF 1y % (Qtr) 75.13 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.29 30.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.07 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.33 0.45
Current Ratio Curr Ratio (Qtr) 1.79 1.09
Debt to Equity Ratio Debt/Equity (Qtr) 0.76 1.01
Interest Cover Ratio Int Coverage (Qtr) 0.00 -38.17
Times Interest Earned Times Interest Earned (Qtr) 0.00 -38.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -246.20 -65.26
EBIT Margin % EBIT Margin % (Qtr) -281.28 -79.53
EBT Margin % EBT Margin % (Qtr) -281.28 -82.47
Gross Margin % Gross Margin % (Qtr) 30.80 35.56
Net Profit Margin % Net Margin % (Qtr) -280.10 -83.18