UPDATE: Imperial Capital Initiates Multimedia Games with Outperform on Growth Position, Upside Potential

In a report published Monday, Imperial Capital analyst Gregg Klein initiated coverage on Multimedia Games Holding Company (NASDAQ: MGAM) with an Outperform rating and $33.00 price target.

In the report, Imperial Capital noted, “We are initiating coverage of Multimedia Games Holding Company, Inc. (MGAM) shares with an Outperform rating with a one-year price target of $33, approximately 27% above the recent share price (as of 6/28/13). The company is being valued at 7.1x total enterprise value, based on our 2014 earnings estimates, which is a discount to most of the select gaming comparables that we analyze. Multimedia Games is in growth mode, as the company is pursuing licenses in new Class III jurisdictions across the country. In addition, we think there is healthy upside potential in its TournEvent system, particularly when the game becomes licensed in Nevada. We believe that the MGAM shares should trade at around an 8.5x multiple, which, based on our 2014 EBITDA estimate of $101.4mn, leads to our price target of $33 per share.”

Multimedia Games Holding Company closed on Friday at $26.03.