Investors may be underrating PlayAGS (AGS) stock right now, despite the firm’s impressive performance of late. Recently, the firm’s share price has been on the rise, and its overall market capitalization is now up over $1 billion. However, AGS’s enterprise value has not kept pace with the positive momentum, suggesting that the company’s intrinsic value is being undervalued.
Clearly, AGS is a company that has enjoyed considerable success over the past few years. In 2019, the firm’s net revenue rose more than 18%, to $318 million, and its operating income nearly doubled, to $51 million. Moreover, AGS’s balance sheet is strong, with a debt-to-equity ratio of just 0.46 and a current ratio of 1.84.
AGS has also made several strategic moves in the last few months that could further enhance shareholder value. In December, the company acquired the gaming assets of Carma Industries, allowing AGS to expand its product offering to include a variety of new interactive gaming experiences. Additionally, the firm has completed several strategic investments, including a joint venture with Stadium Technology Group and a partnership with the National Basketball Association.
The long-term potential of AGS is further underscored by the company’s impressive track record of creating innovative gaming experiences. AGS’s games portfolio includes some of the most popular titles in the industry, including the highly acclaimed “Tiger Claw” and “Escape from Tarkov”. The firm is also well-positioned to capitalize on the increasing demand for mobile gaming apps, as well as the emergence of virtual and augmented reality gaming.
Given the strength of AGS’s financial position and its promising outlook, investors may be undervaluing the company’s stock. AGS’s enterprise value remains well below its market capitalization, suggesting that the firm’s intrinsic worth is currently being overlooked. As such, investors may want to take a closer look at AGS, as the firm’s long-term prospects appear to be quite promising.