With headquarters in Helsinki, Finland, the mobile game capital of the world, and a corporate office in Toronto, Canada, the company specializes in publishing and developing mobile video games and lifestyle applications for a female audience.
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I’m Megan Edwards for Investmentpitch Media
Today’s latest Equity Research report comes from eResearch Corporation.
Analyst Chris Thompson gives Kuuhubb Inc. a one-year target price of $1.85, a premium of 340% to the $0.42 price on February 18, 2020, the day the report was issued.
With headquarters in Helsinki, Finland, the mobile game capital of the world, and a corporate office in Toronto, Canada, the company specializes in publishing and developing mobile video games and lifestyle applications for a female audience.
According to Newzoo’s 2019 Global Market Report, 2.4 billion gamers spent $152.1 billion globally on games in 2019, with mobile games representing $68.5 billion or 45% of the gaming market.
Newzoo further reported that for both women and men, the “Time Filler” persona, consumers who play games to pass the time while waiting or commuting, has the largest share of mobile-first gamers: 50% for women and 30% for men.
Kuuhubb’s apps are free to download from third-party platforms such as Apple’s App Store and the Google Play Store, following the “freemium” business model, offering limited features, while subjecting the users to advertising, a revenue source for the company.
To unlock premium content, functionality and features, and eliminate ads, users can purchase a subscription.
Revenue is also generated from in-app purchases of virtual goods that enhance the game performance.
According to Licensing International, since 2010, the sale of virtual goods has exploded alongside the exponential growth of gaming and the result is a multi-billion-dollar marketplace.
Everyone is probably familiar with the popular freely-downloadable Candy Crush Saga game, which earned $1.5 billion in revenues in 2019.
Kuuhubb currently has eight gaming titles with three titles, Recolor, Recolor by Numbers, and My Hospital generating revenue.
Another three titles, Dance Talent, Tiles & Tales, and Incolour, have “soft” launched in selected markets and are expected to be generating revenue in commercial launch by the end of the year.
One of the most notable platforms is its Match-3 platform, used in the Tiles & Tales app, which management believes could generate $3 to $5 million per month in revenue after its upcoming release.
Kuuhubb plans to leverage its Match-3 platform as it builds a Match-3 Battle Royale, casual eSports, multiplayer elimination game, in which players compete until there is only one player left.
Currently under development with an expected launch date in early 2021, Kuuhubb believes it could generate $5-10 million per month in revenue.
Kuuhubb believes it has a competitive advantage since it owns various proprietary software programs and approximately 50% of all employees at Kuuhubb are women, with the content creation team at almost 80% women.
In January 2020, Recolor reached the Top 10 in Apple’s Top App Charts in the United States and 14 other countries in the Entertainment category, only below Disney+, Netflix, Amazon Prime Video, TikTok, Hulu, and YouTube Kids.
Analyst Chris Thompson stated: “Kuuhubb had grown revenues from $100,000 per month to almost $2 million per month in 2018, before a Board dispute affected sales & marketing efforts and halted the revenue growth momentum. Subsequently, in 2019, revenue for the Company settled into a $1 million per month level; however, with the newly reconstituted Board of Directors and a stable of new product releases, we expect revenue to growth back to the $2 million per month range by the end of 2020.”
The shares are trading at $0.42, a significant discount to eResearch’s $1.85 target price.
For more information please visit the company’s website www.kuuhubb.com, or contact Bill Mitoulas, Investor Relations, at 416-479-9547 or by email at bill@kuuhubb.com.
The full report is available on www.eResearch.com.
Chris Thompson, Director of Equity Research, commented on eResearch’s products: “eResearch Corporation, founded in 2000, is a respected source for institutional-quality, equity research focused primarily on small- and mid-cap companies. Our focus is to identify companies that have near-term catalysts, sound management, and significant potential for share price appreciation. We complement our corporate research coverage with a diversified selection of informative, insightful, and thought-provoking research publications from a wide variety of investment professionals. We provide our professional investment research and analysis directly to our extensive subscriber network of discerning investors, and electronically through our website, www.eresearch.com.”
I’m Megan Edwards for Investmentpitch Media
