Seasoned investors understand that the mantra “buy low and sell high” isn’t just simple advice, but the best way to successfully navigate the stock market. However, despite this tried-and-true method, too many investors act on stock price alone when deciding to buy and sell. Often a drop in stock price can offer investors an opportunity to buy into a company for cheap and reap the benefits once that stock rebounds, which is how PI Financial analyst David Kwan feels about Axion Ventures (TSXV:AXV) (OTCQX:AXNVF).
The gaming investment company’s share price has been dropping in recent months, which makes it a cheap pickup according to Kwan.
“The recent share price weakness is a good buying opportunity in our view, especially with some key upcoming catalysts, most notably multiple licensing deals for RF (and possibly Invictus) as well as updates on the ramp of Rising Fire, particularly after the major content payload set for release next month,” Kwan said.
Axion Ventures’ finances also surpassed Kwan’s expectations after the company reported total revenue of $8.9 million for 2018, up from $6.6 million the previous year. On Adjusted EBITDA, Axion generated $1.7 million, which was also better than Kwan’s negative $1.8 million forecast. Kwan chalked up the improvement to higher-than-expected gross margins and lower-than-expected operating expenses.
Moving forward, the analyst expects Axion’s revenue to be $30.2 million for fiscal 2019 with an adjusted EBITDA of $10.3 million.
Axion Launches Two New Games in Two Weeks
Apart from the rollout of Rising Fire on TencentHolding Limited’s (OTC: TCEHY) WeGame platform, which has over 200 million users in China, Kwan will be keeping his eye on Axion’s highly anticipated mobile game INVICTUS: Lost Soul game, which officially launched at the end of April.
INVICTUS, which is the first AAA quality, eSports focused mobile game made in Thailand, was developed by True Axion Interactive (TAI), a joint venture between Axion Ventures and the True Corporation.
Axion Ventures also launched a second game in a matter of two weeks, a WWII flying battle royale-style game called Fighter Royale: Last Ace Flying. The game was officially launched on May 15 on Steam, a video game digital distribution platform that boasts 30,000 games and 47 million daily active users.
The company currently has an impressive portfolio of nine video games in development (including same game derivatives), representing over 2,000 man-years of investment, five of which are expected for open beta launch this year. Axion also plans to launch a third game later this year.
Despite Axion’s price drop, Kwan remained bullish on Axion Ventures, giving the company a solid “buy” recommendation and increasing its price target from $1.50 up to $1.75, which is significantly higher than the stocks current price of $0.85 CAD.
Axion’s share price had another red day Friday, closing at $0.85 CAD (-1.16%), and remained unchanged at $0.85 CAD by 12:00 pm EST Monday.
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