Analyzing Small Cap Stocks: Gamehost
The TDR Three Key Takeaways regarding Gamehost and Analyzing Small Cap Stocks:
- Gamehost Inc. was featured on TDR Small Cap Sunday
- Gamehost reported $84 million revenue with 12.7% annual revenue growth.
- Gamehost’s 4.8% dividend yield highlights its financial stability.
Gamehost Inc. (TSX: GH) Gamehost was featured in Small Cap Sunday last week. This is a review of what we learned. Gamehost Inc. is a small-cap company based in Red Deer, Alberta, operating three casino properties in Fort McMurray, Grand Prairie, and Red Deer. These locations are strategically chosen for their high-income demographics and limited entertainment options. This strategy has enabled Gamehost to capitalize on a consistent customer base, particularly during the long, cold winters when outdoor activities are limited.
The company reported revenue of $84 million for the last fiscal year, reflecting a revenue growth rate of 12.7% over the past 12 months and 34% over the last three years. This is notable in the context of the global gambling industry, which has an annual growth rate of just under 4%.
Gamehost’s gross margin stands at 49.6%, highlighting its operational efficiency. This strong margin has translated into levered free cash flow of $23.5 million last year, up from $18.4 million in the previous year. The company’s financial health supports a substantial dividend, which grew by 33% over the last 12 months, providing a current yield of 4.8%.
A critical aspect of Gamehost’s appeal is its financial stability, evidenced by its credit score of 5.6, indicating a low risk of financial distress. The company’s conservative debt profile minimizes financial risk, positioning it well to withstand economic downturns and market volatility.Gamehost’s focus on mid-level cities with limited entertainment options ensures a steady stream of customers, reducing the need for extravagant attractions and allowing the company to concentrate on its core business. Alberta’s high interprovincial migration rate and population growth of 4.4% last year provide a solid foundation for continued revenue growth. As the population in these northern communities increases, the demand for entertainment options, including Gamehost’s casinos, is expected to rise. Tune in each Sunday at 8 PM EST to watch Small Cap Sunday, featuring four different small-cap companies. Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!
