Online game

Why the online game Golden Nugget won big today

What happened

Golden Nugget Online Casino (NASDAQ: GNOG) could finally be on a winning streak. A stock generally down for most of this year, shares closed nearly 11% on Thursday. A new analysis of the company was rather positive on its outlook.

So what

On Tuesday, financial services firm B. Riley launched a hedge on Golden Nugget shares with a clear buy rating at a price target of $ 27 per share, more than double the current level of $ 12.25 .

Image source: Getty Images.

Analyst David Bain wrote:

We believe that GNOG’s supported iGaming [i.e., online casino gaming] market share in New Jersey, the most mature US legal iGaming market, justifies our cautious market share ramp assumptions in future iGaming market implementations and provides case study visibility into the profitability of GNOG.

Bain also believes that Golden Nugget’s focus on casino gambling makes it a better investment than the currently popular online sports betting operators, such as DraftKings. He believes that this focus, combined with an effective brand image and a user experience that sets the company apart, makes it a very convincing investment.

Now what

Bain also writes that “Golden Nugget’s recent and expected market entry is expected to triple its [total addressable market] by the end of next year. “

Investors are excited that new opportunities for online gambling are emerging, with more states activating legalization. So Golden Nugget, somewhat lagging behind in the segment so far this year, could very well be ready for a growth spurt.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.