Scientific Games (SGMS) Expands Footprint in North America
Scientific Games Corporation SGMS has expanded its footprint in North America with the launch of its gaming platform in Ontario, Canada. The company, currently doing business as Light & Wonder, expects the geographic expansion to strengthen its position in emerging markets and establish itself as the leading cross-platform global gaming firm in the long run.
As iGaming Ontario – an agency of the Government of Ontario – officially launched its regulated online gaming market for private operators on Apr 4, 2022, Scientific Games was among the first companies to tap this opportunity and launch its product offering adhering to the compliance standards of the regulator. This, in turn, will extend the reach of its content and technology platform OpenGaming and will make its top-performing games from in-house studios widely available to gaming buffs in the region. These include a repository of more than 3,500 games supported by a comprehensive range of responsible gambling tools for a safe and enjoyable gaming experience for players.
The company has embarked on a series of strategic steps over the past few months to transform itself into a cross-platform global gaming entity. Notable endeavors include the divestiture of its Lottery and Sports Betting businesses and the proposed rechristening of its corporate name to Light & Wonder, reflecting its focus on gaming content, hardware and systems that connect to iconic titles.
The transition marks a deliberate ploy to bring great game franchises to players on the go, including games in land-based casinos, online and mobile and in both real money and free-to-play social gaming markets. Scientific Games aims to operate under the new name from Spring 2022 and correspondingly change its ticker symbol to LNW.
However, a sluggish macroeconomic condition in international markets like China is a headwind for Scientific Games. The company derived almost 31% of 2021 revenues from sales to customers outside the United States. We believe lackluster growth in such major markets will remain an overhang on the stock.
Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SGMS has gained 28.7% over the past year compared with the industry’s growth of 7.8%.
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Rimini Street, Inc. RMNI, sporting a Zacks Rank #1, is a solid pick within the broader industry classification. It has a long-term earnings growth expectation of 10% and delivered an earnings surprise of 60.4%, on average, in the trailing four quarters.
Earnings estimates for the current year for Rimini have moved up 16% since August 2021. The company offers premium integrated application management and support services that enable enterprise software licensees to save significant costs, free up resources and achieve better business outcomes.
Benefitfocus, Inc. BNFT, carrying a Zacks Rank #2 (Buy), is another key pick for investors. It has a long-term earnings growth expectation of 30% and delivered a modest earnings surprise of 84.4%, on average, in the trailing four quarters. Earnings estimates for the current fiscal have moved up 53.3% since April 2021, while that for the next fiscal is up 75% over the same time frame.
Benefitfocus offers innovative SaaS solutions, which help to simplify the complexity of operations while unlocking the potential for better health and improved outcomes. Over the past six months, it has gained 17.3%.
Mimecast Limited MIME is a Zacks Rank #2 stock. It has a long-term earnings growth expectation of 15% and delivered an earnings surprise of 14.6%, on average, in the trailing four quarters.
Over the past year, Mimecast has gained 97.2%. Earnings estimates for the current fiscal have moved up 19% since April 2021, while that for the next fiscal is up 13.8% over the same time frame. Mimecast aims to help firms from malicious activity, human error and technology failure for building a more resilient organization.
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