With 2021 now in the books, we’ve left behind an incredibly strong year for the stock market. The S&P 500 index logged 70 new all-time highs throughout the year and delivered a return of 27% — far above the index’s 10-year average of 13%. But now, we’re in a brand new year…
and although historical averages suggest 2022 won’t be as strong as 2021, investors can still find market-beating returns in many individual stocks. In fact, prominent Wall Street firms think these two mobile-gaming companies could supercharge your portfolio over the next 12 months.
1. Sea Limited: Implied upside of 90%
Singapore-based Sea Limited (NYSE:SE) reached an all-time high of $373 in October before a broad tech sell-off struck it down to $224, where it trades today. The company is a triple threat when it comes to the digital economy, operating in high-growth industries that include mobile gaming, e-commerce, and digital payments.
Its mobile-gaming business, Garena, owns Free Fire, one of the top-grossing games in both Apple‘s App Store and Alphabet‘s Google Play store. In 2021, the game surpassed one billion downloads and hit a record-high 150 million daily active users. Given that it launched in 2017, its continued popularity is incredibly impressive.
In the third quarter, Sea Limited generated $2.7 billion in revenue, up 122% year over year. Its digital entertainment segment (which includes gaming) was responsible for $1.1 billion of that top line, and its e-commerce segment (which includes payments) contributed $1.5 billion. The latter grew faster at 134% year over year.
But looking at the big picture, the company is on track to deliver $9.5 billion in full-year 2021 revenue. That’s 800% growth since 2018, when it cleared $1 billion in annual revenue for the first time.
It’s little wonder that investment bank Barclays has attached a $427 price target to Sea Limited stock, which means the bank expects shares to soar over 90% from here.
2. Skillz: Implied upside of 236%
When it comes to mobile gaming, Skillz (NYSE:SKLZ) takes a different approach to Sea Limited. It doesn’t develop games itself, instead building an ecosystem for developers to generate revenue from their creations. The platform is designed to solve a critical problem: Just 2% of game developers achieve “break-through success” in the industry, according to the company, so developers need to get creative about how they monetize.
Skillz runs real-money tournaments for its users with the games on its platform. Players pay an entry fee and have the potential to win a cash prize if they manage to rank high enough. Out of the prize pool…
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