KNAMF - A Red Letter Day For Konami (Just Don't Look At The Sports Centers)

• Not much stood out as particularly thesis-altering in Konami's most recent earnings brief; so why are investors piling in now?
• Konami achieved record quarterly revenues from its mobile titles, like Professional Baseball Spirits A and Yu-Gi-Oh! Duel Links, but this growth, while impressive, was in line with expectations.
• Debt issued in July is now finally reflected on the balance sheet, greatly inflating Konami's cash pile; however, this was known albeit hidden in the last earnings report.
• Despite the recent rally, Konami is still undervalued book-wise and overvalued earnings-wise relative to its peers, implying investors are betting big on future earnings growth potential.
• More immediately, Konami needs to provide a more concrete plan for its hemorrhaging sports centers, considering the segment is operating at a -50% margin.

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