Initiate coverage with an Outperform rating. We view Engine Media as among our favorite plays in the fast growing esports and iGaming industries. The esports audience is growing rapidly with 2.8 billion gamers and 50 million e-sport viewers according to NewZoo. We believe that the company's sports betting business, Winview, has an unique in-play betting platform that should show rapid revenue growth.Diversified revenue streams. The company has multiple business lines with various revenue streams from advertising, sponsorships, and subscriptions. In fact, a large 28% of its revenues are derived from a SaaS model. Notably, each of these business lines offer attractive growth opportunities. Investing to enhance revenue growth and swing toward positive EBITDA. The company is in investment mode to enhance revenue growth and to scale its platform for esports and iGaming businesses. We believe that the investments should allow the company to swing toward positive EBITDA by fiscal year end August 2023. Engine Media would be an attractive acquisition for either gaming and gambling companies. We believe the combination of gaming and media could make Engine Media an attractive take-out candidate for esports companies and/or companies interested in building an iGaming platform. Furthermore, we view the shares as an option on a successful outcome of its lawsuit against Draftkings (DKNG) or other suits that may come. Posting a $14 price target. Near current levels, the GAME shares trade at a modest 1.0 times Enterprise Value to our fiscal year 2022 revenue estimate of $60.5 million. Our $14 price target anticipates a target multiple of 3.7 times EV to Revenue, which we believe conservatively discounts the company below its average peer group multiple of 5.4 times. Read More >>