The 3 Best Entertainment Stocks to Buy and Own Right Now

With interest rates rising in a turbulent macroeconomic environment, discretionary spending is expected to decline. This is expected to hit non-essential sectors such as entertainment where demand is expected to weaken.

However, interactive entertainment should remain the exception. Gaming received a boost amid widespread lockdowns during the pandemic.

The gambling market has grown with rising per capita income, growing interest and increasing number of dual income households, complementing the transformation of the world market. With the increasing penetration of smartphones and the adoption of clouds, the global gaming market is expected to do so grow at 13.2% CAGR reach $545.98 billion by 2028.

Given these developments, it could be a good time to invest in entertainment stock Playtika Holding Corp. (PLTK), DoubleDown Interactive Co Ltd (DDI) and GRAVITY Co.Ltd. ADR (GRVY).

Playtika Holding Corp. (PLTK)

PLTK is a mobile games developer based in Herzliya, Israel. The Company distributes its portfolio of casual and casino-themed games to retail customers via various web and mobile platforms.

On November 21, PLTK announced it had entered into an agreement for a US$25 million minority stake in Turkey’s mobile gaming company Ace Games (“Ace”). The company believes this is an important milestone in the execution of its new gaming investment strategy.

On October 10, PLTK announced that it had accepted 51,813,472 of 73,905,922 shares validly tendered for purchase for a total consideration of US$600 million. This is expected to have a positive impact on the EPS of PLTK’s outstanding shares for years to come.

For the third quarter ended September 30, 2022, PLTK revenue increased 1.9% year over year to $647.8 million. During the same period, casual games, which accounted for 54.9% of total revenue, grew 14.4% year over year, while the company’s average daily paying users (DPUs) grew 5.8% year over year to 3,10,000 users.

PLTKs Adjusted EBITDA for the quarter was $230.7 million, while net income was $68.2 million, or $0.17 per share. The company’s total assets were $2.99 ​​billion as of September 30, 2022 compared to $2.8 billion as of December 31, 2021.

Analysts expect PLTK’s fiscal 2023 revenue and EPS to increase 2.8% and 30.3% year over year, to $2.69 billion and $0.84, respectively. The stock is down 1.5% over the past month to close the last trading session at $9.27.

PLTKs POWR ratings reflect these promising prospects. The stock has an overall rating of B, which means Buy in our proprietary rating system. The POWR Ratings evaluate stocks based on 118 different factors, each with its own weighting.

PLTK is rated A for value and B for quality. Within the Entertainment – Toys & Video Games 5th out of 21 stocks in the industry.

click here for additional POWR ratings for sentiment, momentum, growth and stability for PLTK.

DoubleDown Interactive Co Ltd (DDI)

Based in Seoul, South Korea, DDI is engaged in the development and delivery of online and mobile games to domestic and overseas markets. Popular offerings include DoubleDown Casino, DoubleDown Fort Knox, DoubleDown Classic and Ellen’s Road to Riches.

During the third quarter, DDI agreed in principle to settle the Benson class action and is not expected to incur any related fees in the future.

As part of its growth plans, DDI is now focused on releasing its new title, Spinning in Space, before the end of the year while continuing to develop new titles for 2023 and refresh its flagship DoubleDown Casino.

DDI revenue of $78.8 million for the third quarter of 2022 was up 14% from the third quarter of 2019 (the most recent pre-pandemic comparable period). Additionally, it maintained its average revenue per daily active user (“ARPDAU”) at $0.96, comparable to the same quarter last year, despite global inflation and recessionary pressures affecting player behavior.

During the same period, DDI even slightly increased its Monthly Active Users (MAUs) to 2.27 million compared to the prior-year quarter. The Company’s total assets as of September 30, 2022 were $1.03 million compared to $969.81 thousand as of December 31, 2021.

Analysts expect DDI’s revenue to grow 1.6% year-on-year to $327.97 million for the fiscal year ending December 2023. During the same period, the company’s earnings per share are expected to increase to $1.50 per share.

The stock is down 1.8% over the past month to close the last trading session at $8.90.

DDI has an overall rating of B, resulting in a purchase in our POWR rating system. The stock has an A rating for value and sentiment, and a B rating for stability and quality.

DDI leads the 21 stocks in the Entertainment – Toys & Video Games industry.

Additional DDI Growth and Momentum POWR Ratings can be found here here.

GRAVITY Co.Ltd. ADR (GRVY)

GRVY is based in Seoul, South Korea. The company distributes, develops and publishes online games in South Korea, Taiwan, Thailand and Japan. It categorizes products into over three categories: mobile games and applications, online games and other games, and gaming-related products and services.

On November 15th, GRVY announced the official launch of its critically acclaimed game Ragnarok Begins in North America. The game can be played on both PC and mobile and is expected to be a game changer for the company.

GRVY’s total revenue for the third fiscal quarter ended September 30, 2022 increased 6.1% sequentially to ₩102.38 billion (US$75.76 million). Mobile games revenue grew 16.8% sequentially to ₩79.44 billion (US$58.79 billion).

Net income for the quarter attributable to GRVY was ₩16.08 billion (US$11.90 million). The Company’s total assets as of September 30, 2022 were ₩397.89 billion (US$294.44 million) compared to ₩327.53 billion (US$242.37) as of December 31, 2021.

The stock fell 1.3% over the past month to close the last trading session at $42.67

GRVY has an overall rating of B, which equates to a purchase in our POWR rating system. It has an A grade for value.

GRVY is ranked 5th in the same industry. click here for additional GRVY growth, stability, sentiment, quality and momentum ratings.


PLTK shares traded at $9.26 per share on Tuesday afternoon, down $0.01 (-0.11%). Year-to-date, PLTK is down -46.44% versus a -14.96% gain in the benchmark S&P 500 over the same period.

About the author: Santanu Roy

Fascinated by the traditional and evolving factors that influence investment decisions, Santanu decided to pursue a career as an investment analyst. Before moving to investment research, he was a process associate at Cognizant. With a master’s degree in business administration and a fundamental approach to analyzing companies, he aims to help individual investors identify the best long-term investment opportunities. More…

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