1. PlayAGS, Inc. (NYSE:AGS)
Number of Hedge Fund Holders: 31
Market Capitalization as of August 21: $454.69 million
PlayAGS, Inc. (NYSE:AGS) is an international designer and seller of gaming products and services. The company operates mainly through three business segments including Electronic Gaming Machines (EGM), Table Products, and Interactive Games.
To understand the role PlayAGS, Inc. (NYSE:AGS) plays in the casino and gambling industry, it is important to look at each of the business segments in detail. The EGM segment offers a variety of video slot titles and gaming cabinets for the marketplace, whereas the Table Products include table games including side bets, card shufflers, progressives, and other gaming equipment and technology. The table products of PlayAGS, Inc. (NYSE:AGS) are used for casino games including blackjack, poker, baccarat, craps, and roulette. Lastly, the Interactive Game segment offers a platform for B2B content aggregation used by real-money gaming and sports betting partners. It also provides B2C social casino games through the Lucky Play Casino mobile app.
The company posted a successful fiscal Q4 2023, demonstrating its potential for future growth and solidifying its place in the casino industry. Revenue of PlayAGS, Inc. (NYSE:AGS) improved 15% year-over-year, marking the 11th quarter of double-digit growth. Revenue growth was broad-based with all three segments demonstrating record growth.
Global EGM sales reached a record high of 1,519 units up 30% year-over-year, whereas Table Products revenue surged 24% to a record high producing around 20% increase in adjusted EBITDA of the company. Lastly, the Interactive revenue was also a success surging more than 30% to a record high of $3.4 million.
The strategic edge of the company lies in the range of innovative product offerings and its ability to generate record revenues each quarter. In addition to increasing its revenue, PlayAGS, Inc. (NYSE:AGS) was also able to grow its operational income by 19% year-over-year, indicating operational profitability.
If you look beyond the recent quarter, you will see that the company has grown its top line by 5% and its bottom line by 4.5%. It is one of the best small-cap casino stocks hedge funds are buying because it was held by 31 hedge funds in Q2 2024, with total stakes worth $119.24 million. Renaissance Technologies is the top shareholder of the company with a position worth $20.38 million.
While we acknowledge the potential of PlayAGS, Inc. (NYSE:AGS) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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