* Calling it “a pure play on esports and video game lifestyle,” Canaccord Genuity analyst Robert Young initiated coverage of Toronto-based GameSquare Esports Inc. (GSQ-CN) with a “speculative buy” rating and 60-cent target.
“GameSquare is an emerging digital marketing agency focused on the high growth video game and esports market,” he said. “The company leverages digital media, influencer marketing and esports team assets to act as a bridge between brands and the large, youthful, and highly sought after esports community. Through the recent acquisition of Complexity Gaming, a popular esports organization affiliated with the Dallas Cowboys, GameSquare became the esports and gaming agency of record to the Cowboys organization on a multi-year deal, elevating the profile significantly. Our positive view is to some extent a ‘bet on the jockey’ given a seasoned management team led by Justin Kenna, who was a key driver of growth at FaZe Clan, a global esports organization. Marquee investors include Jerry Jones (Dallas Cowboys) and Travis Goff, who together own 47 per cent of GameSquare and suggest a high level of access to Cowboys resources. While GSQ shares have been under pressure recently alongside small-cap tech peers, we see an opportunity for multiple expansion as investors better understand the company’s positioning relative to industry tailwinds. Higher risk and a limited operating and financial track record inform our SPECULATIVE BUY rating.”