Super League Gaming (SLE) PT Lowered to $3 at Maxim Group

Maxim Group analyst Jack Vander Aarde lowered the price target on Super League Gaming (NASDAQ: SLE) to $3.00 (from $4.00) while maintaining a Buy rating.

The analyst commented: "On 10/1, SLE announced a pending major transaction and partnership with Infinite Reality, Inc., in which Infinite Reality will secure a majority stake in SLE and make a capital commitment and asset transfer. SLE is expected to acquire various assets with synergies to the core business including a perpetual license to create and host events for Drone Racing League, TalentX, Fearless Media, Thunder Studios, and certain to-be-determined esports assets, as well as $20M cash from divested assets and a future $30M credit facility. SLE ended 2Q24 with cash of $1.7M and $0.2M of debt, and raised approximately $1.65M gross proceeds after the quarter. Based on our revised financial projections, we believe SLE may require additional capital in the next 9–12 months. We note our valuation and estimates continue to reflect standalone SLE only, but we have a positive view of the terms of the pending agreement. However, given the challenging macro environment, we lower our 2024E revenue to $23.8M, down 5% y/y, from $26.0M, and our 2025E revenue to $38.0M, up 59% y/y, from $41.0M. We reiterate our Buy rating, but lower our DCF-based price target to $3.00 ($4.00 prior), representing a 2025 EV/revenue multiple of 1.0x (1.2x prior)."

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