3 Under the Radar Gaming Technology Companies Outperforming the Market in 2021

NYSE: IGT | International Game Technology PLC News, Ratings, and Charts

IGT – The gaming industry is one of the fastest-growing industries globally due in-part to its ongoing integration of advancing technology. Gaming has generated substantial returns and has promising prospects. Furthermore, with the legalization of sports betting across several states, the industry is gaining traction. Popular gaming stocks International Game (IGT), Everi Holdings (EVRI), and Inspired Entertainment (INSE) have outperformed the broader market this year and we think could be solid additions to one’s portfolio now. So, let’s give these names a closer look. Read on.

The gaming industry is one of the world’s fastest-growing industries. Its revenue is estimated to increase to $200 billion by 2023, buoyed by technological advances. The American Gaming Association (AGA) reported in October that the United States commercial gaming industry had maintained its momentum, with combined revenue from traditional casino gaming, sports betting, and iGaming standing at $4.75 billion, up 30.7% from October 2019.

Also, with sports betting legalized in several states, the gambling industry is gaining traction. In October, sports gamblers wagered $7 billion, representing a 20-fold-plus increase from June 2018. The global online gambling market is expected to be valued at more than $92.9 billion by 2023, almost double its current market size.

Given this backdrop, we think the stocks of popular gaming technology companies  International Game Technology PLC (IGT), Everi Holdings Inc. (EVRI), and Inspired Entertainment, Inc. (INSE) might be reasonable additions to one’s watchlist. These stocks’ year-to-date gains have outperformed the broader SPDR S&P 500 ETF Trust’s (SPY) gains of 24.8% over the same period.

Click here to check out our Video Game Industry Report for 2021

International Game Technology PLC (IGT)

IGT is a worldwide provider of gaming technology products and services. Based in London, the company operates through Global Lottery and Global Gaming segments. It provides point-of-sale machines for reconciling lottery funds and online lottery transaction processing systems.

On December 2, IGT announced the recertification of its lottery operations by the World Lottery Association (WLA), recognizing the company’s responsible gaming standards. Regarding this recertification, Wendy Montgomery, IGT SVP, Marketing, Communications and Sustainability, said, “This recertification from WLA reinforces our leadership and commitment as a responsible vendor, as well as demonstrates the effectiveness of our responsible gaming technologies that we provide to our lottery customers worldwide.”

On November 17, IGT declared a multi-year agreement with Cliff Castle Casino in Camp Verde, powering the casino’s retail sportsbook and enabling guests to place pre-match and in-game wagers. The deal is expected to allow the company to capitalize on Arizona’s growing sports betting market.

For its fiscal third quarter, ended September 30, IGT’s total revenue increased 20.6% year-over-year to $984 million. Its net income and net income per common share attributable to IGT came in at $65 million and $0.31, respectively, up substantially from their negative year-ago values. And its total adjusted EBITDA from continuing operations rose 41.8% from the prior-year quarter to $407 million.

A $0.50 consensus EPS estimate  for the current quarter (ending December 2021) indicates a 308.3% year-over-year increase. Likewise, the $1.03 billion consensus revenue estimate for the current quarter reflects an 84.3% improvement from the same period last year. Furthermore,  IGT has an impressive surprise earnings history; it has topped consensus EPS estimates in three of the trailing four quarters.

The stock has gained 55.3% in price over the past year and 45.2% year-to-date to close yesterday’s trading session at $24.60.

IGT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

IGT has a Value, Sentiment, and Quality grade of B. In the 32-stock Entertainment – Casinos/Gambling industry, it is ranked #4. Click here to see the additional POWR Ratings for IGT (Growth, Momentum, and Stability).

Everi Holdings Inc. (EVRI)

EVRI in Las Vegas, Nev., is an entertainment and technology solutions provider for the casino and digital gaming industries in the United States and other countries. The company supplies progressive gaming products and TournEvent, a slot-tournament terminal and system machine, and operates through the Games and FinTech segments.

On December 13, EVRI formed a new partnership to bring its gaming content to the online casinos of Atlantic Lottery Corporation (ALC). The company intends to deliver its iGaming slot content to ALC via the Spark Remote Game Server (Spark RGS). The partnership is expected to expand the company’s footprint in Atlantic Canada.

In November, EVRI announced its agreement with a payment solutions provider, Shift4 Payments Inc. (FOUR), to integrate EVRI’s CashClub Wallet® technology with FOUR’s end-to-end payment solution. The company might benefit from this agreement by providing casino patrons with a convenient, casino-wide funding experience.

EVRI’s total revenues increased 50.1% year-over-year to $168.30 million for its fiscal third quarter, ended September 30. Its operating income improved 179% from the prior-year quarter to $55.07 million. Its net income and EPS stood at $6.75 million and $0.07, respectively, registering a substantial increase over their negative year-ago values.

The Street’s $0.36 EPS estimate for the current quarter (ending December 2021) reflects a  3,500% from the prior-year quarter. And the Street’s $166.97 million revenue estimate for the current quarter indicates a 39.7% year-over-year increase.

Over the past year, EVRI’s stock has gained 39.1% in price to close yesterday’s trading session at $19.10. It has gained 38.3% year-to-date.

It is no surprise that EVRI has an overall A rating, which translates to Strong Buy in our POWR Rating system.

EVRI has an A grade for Sentiment and a B grade for Growth, Value, and Quality. It is ranked #4 out of the 125 stocks in the Financial Services (Enterprise) industry. To see the additional POWR Ratings for Momentum and Stability for EVRI, click here.

Inspired Entertainment, Inc. (INSE)

London-based INSE functions as a business-to-business gaming technology company. The company operates through the four broad segments: Gaming; Virtual Sports; Interactive; and Leisure and supplies virtual sports and server-based gaming (SBG) products to regulated lottery and gaming operators worldwide.

On November 16, INSE announced that it had signed a multi-market contract with an online gaming company, Novibet, to launch its interactive virtual sports content. The partnership with a leading gaming company like Novibet should benefit INSE.

Also in November, INSE declared that the company had signed a contract with Mozzart, an Eastern-European iGaming operator. The company has agreed to supply Mozzart with the Virtual Plug & Play™ (VPP). Regarding the contract, Brooks Pierce, President, and Chief Operating Officer, said, “Mozzart is a leading online gaming operator in Eastern Europe, and we are thrilled to become their primary Virtual Sports provider across all brands and territories.”

For its fiscal third quarter, ended September 30, INSE’s total revenue increased 29.1% year-over-year to $77.60 million. Its  net operating income rose 81.7% from the same period last year to $14.90 million. And its net income and net income per common share improved 4,900% and 1,400%, respectively, from the prior-year quarter to $25 million and $0.30.

Analysts expect INSE’s EPS to increase 114.1% year-over-year to $0.23 in its next year (fiscal 2022). A  $273.01 million consensus revenue estimate for the coming year reflects a 34.1% improvement year-over-year. In addition, INSE has beaten consensus EPS estimates in three of the trailing four quarters, which is impressive.

INSE’s shares have gained 84.2% in price over the past year and 73.6% year-to-date to close yesterday’s trading session at $11.42.

INSE has a Value and Quality grade of B. It is ranked #9 in the Entertainment – Casinos/Gambling industry. In addition to the POWR Rating grades we have stated above, one can see INSE ratings for Growth, Momentum, Stability, and Sentiment here.

Click here to check out our Video Game Industry Report for 2021


IGT shares were trading at $26.57 per share on Friday morning, up $1.97 (+8.01%). Year-to-date, IGT has gained 57.99%, versus a 24.39% rise in the benchmark S&P 500 index during the same period.


About the Author: Anushka Dutta


Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...


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