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Can Gaming Be the Catalyst That Drives HOFV Stock Higher?

Just when things looked like they couldn’t get worse for Hall of Fame Resort & Entertainment Co. (NASDAQ:HOFV), the market started what is becoming a prolonged correction.

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This story originally appeared on MarketBeat

Legalized sports betting may be a driver of revenue

Just when things looked like they couldn't get worse for Hall of Fame Resort & Entertainment Co. (NASDAQ:HOFV), the market started what is becoming a prolonged correction. That's taken HOFV stock, which was already a penny stock, even lower. As of this writing, the stock is literally a penny stock trading for just 89 cents a share.

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Risk-on assets have fallen out of favor. And a company that is not yet profitable and has very little revenue certainly qualifies as a risk-on stock.

What I'm saying is that HOFV is not a stock you should invest in with money you can't afford to lose. It's a gamble for sure. But it's gambling that may be the reason for optimism.

A Sum of Its Parts Stock

Hall of Fame Resort & Entertainment has three distinct verticals: media, gaming and on-site asset creation. And, the company is building many of its facilities near the Pro Football Hall of Fame, with which it shares a common vision.

It's probably appropriate that Michael Crawford is the president and chief executive officer (CEO) of the Hall of Fame Resort & Entertainment Company. Crawford has prior executive experience with Disney (NYSE:DIS). And both companies are what I classify as "sum of its parts" stock.

This is my colloquial way of saying that HOFV has many verticals that all work together. You'll hear Crawford use the word synergy quite a bit. But that's the opportunity in the stock. Once the company is firing on all cylinders, it will have many ways to generate revenue.

One way the company offers an attractive alternative for investors is its partnership with the Pro Football Hall of Fame and I Got It that immediately makes the company a significant force in the non-fungible token (NFT) market.

No matter how you may feel about NFTs, the idea of digital collectibles and hall-of-fame players has a "synergy" that's easy to see.

Legalized Sports Betting Continues to Expand

When I last wrote about HOFV stock in November, sports betting was still not legal in Ohio. That changed in December. However, legalized sports betting won't begin in Ohio until January 1, 2023. That gives HOFV time to get their house in order.

A key first step was the company's hiring of Rob Borm, an experienced gaming executive, to head up its gaming vertical. Borm is tasked with expanding this vertical so that the company can capitalize on what is likely to be significant revenue opportunity. To that end, the company signed a 10-year agreement with Rush Street Interactive that will bring a "premier sports betting location" to the company's Canton, Ohio resort. The company also has struck a deal with Genesis Global to develop a mobile sports betting app.

What's On Tap For Earnings?

Investors will look for continued revenue growth. With the partnerships the company already has in place, higher revenue looks likely. And in an interview earlier this month, Crawford outlined the steps the company has taken to manage its short-term debt.

In fact, in January 2022 the company received its first rating from the analyst community. And Maxim Group gave the stock a buy rating with a price target between $5 and $6.

With that said, profitability is still some time away. That's why I'll end this article the same way I began. This isn't a stock for investors looking to build the risk-off portion of their portfolio. But if you have a long-term outlook and a willingness to be patient, this picks-and-shovel play on the National Football League has the potential to be a rewarding investment.

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