Analyst Issues Upside Price Target on Gamzio Mobile, Inc. as Company Executes on High-Growth Strategy for Social Casino Mobile Venues

New York, NY / ACCESSWIRE / October 14, 2014 / Gamzio Mobile, Inc. (OTCQB:GAMZ - News) is identified in a newly issued analysts report by equities research firm Level 5 Research with upside market valuation. Gamzio is a developer and publisher/operator of real-money and social media casino games for play on mobile digital platforms. The Company is at an inflection point as it is advancing several quality apps on a monetization and high-growth user acquisition strategy that will increasingly position GAMZ as a high-priority buy-out target, at significantly increased market-cap than its current. GAMZ has a near-term goal of reaching over 700,000 daily active users (DAU). Over the last few years two large gaming enterprises, Bally Technologies Inc. (NYSE:BYI - News) and Caesars Acquisition Company (NasdaqGS:CACQ - News), have have been purchasing the top companies in the Social Casino industry when they approach critical mass. GAMZ is positioned for potential extraordinary share price appreciation over the coming months as the reality of the large inherent value that the Company possesses in active-user clientele for its proprietary digital venues is understood by the market and DAU milestones are achieved.

The analyst has identified Gamzio Mobile, Inc. as significantly undervalued at current share price valuation; the analyst initiated coverage of GAMZ with a 'BUY' rating and a conservative 12-month target of $0.50/share (a 40% execution-risk discount to the analyst's forecasted $0.84/share target). With 58.18 million shares outstanding and fully diluted (there are no options or warrants outstanding), the analyst's share price target appears readily achievable as it is based on a marketcap substantially less than what comparable entities have been valued at when they became the subject of a buyout after achieving similar metrics that GAMZ is aiming to achieve near-term.

The two-part combined Analyst report with October-2014 upgrade may be found at http://sectornewswire.com/AnalystsReport-GAMZ-23-09-14.pdf online.

The Analyst's report provides insight, metrics, and analysis of each of Gamzio's three main product venues; 1) Slots-O-Luck Adventure, 2) Go-Go Casino, and 3) Casino Island Adventure.

Gamzio's popular Slots-O-Luck Adventure app has been bestowed one of the highest and most coveted rankings in its peer group at the Apple App Store (see the following links to play/field-test the app at the Apple App Store):
- https://itunes.apple.com/us/app/slots-o-luck-adventure-hd/id590810076?mt=8 and/or
- https://itunes.apple.com/us/app/slots-o-luck-adventure/id644279872?mt=8

Gamzio's Go-Go Casino app is a recent acquisition for the Company, it has a sizeable built-in user base, and it has been upgraded for an October-2014 Facebook re-launch.

Gamzio's Casino Island Adventure is the Company's real money slot game; recently launched and currently available in the U.K. App Store with plans to expand and grow the product.

Valuation:
Level 5 Research has initiated coverage on Gamzio Mobile, Inc., with a Buy [upgraded] rating and a 12-month price target of $0.50. L5 bases its rating on the potential shareholder value that is being created by Gamzio’s Social Casino and Real-Money business segments. Level 5 believes that the combined business segments will begin to generate meaningful revenue over the next 12 months and grow the Daily and Monthly Active Users as the Company begins to cross-market to their nearly 400,000 users of all of their games.

Social mobile games generate about $0.10/user/day, and social casino games tend to outperform the overall market in terms of revenue per player. Gamzio stated target of 700,000 daily users at $0.10/day/user should generate $70,000/day in revenue, which is $25,555,000 in annualized revenues. Companies that reach the 700,000 DAU threshold have been acquired for about $100,000,000, which is close to an 8-10x multiple on trailing revenues and a 4x multiple on annualized forward revenues. There is real value for the company below the 700,000 DAU level. Every 100,000 DAU is equivalent to $3,650,000 in revenues and carries $14,600,000 in valuation for the company at 4x forward revenues. The Go-Go Casino acquisition brought the company 361,000 users and the company has over 30,000 users of the Slots-O-Luck game, leaving Gamzio with nearly 400,000 combined users. As Gamzio begins their marketing and cross-marketing strategies, turning 100,000 of these users into Daily Active Users should be expected. We can make the argument that the Social Gaming sector of the company is worth nearly $14,000,000 today. As Gamzio begins spending on anticipated marketing efforts over the next 6 months, this valuation could raise significantly.

Gamzio offers another revenue stream, which is Real-Money Gaming. This segment of Gamzio’s business could also yield millions of dollars of revenue. The Real-Money division just launched last quarter and is now positioned to add significant value to the company. Since this is Gamzio’s first foray into Real-Money play and is the first effort of their gaming partner, Cashbet, into the mobile casino setting we anticipate their may be some bumps in the road from the standpoint of making every facet of the casino work perfectly. That said, the beta testing has gone well and the full launch is underway. Given the potential of the Real-Money division L5 is giving this segment of Gamzio’s business a current valuation of $3,000,000. Level 5 believes $3,000,000 is what a well-funded acquirer would pay for the property now, to avoid spending 12 months to build a product from scratch. L5 estimates that a Real-Money player puts $1,000/month through the slot games, the house should make about 6% on that money ($60). $60/month per user is $720/year per user. If Gamzio can get to 10,000 users for this division, the total generated revenue will be $7,200,000. Level 5 Gamzio’s partnership with Cashbet has the companies splitting the revenues of the games 60%/40%, with Gamzio receiving the 60%. Under our expected scenario, Gamzio will receive $4,320,000 annual revenue from the 10,000 DAU. L5 believes Gamzio can reach 10,000 DAU on their Real-Money property in 6 months, and believes L5's valuation of the Real-Money division of Gamzio's business is conservative.

Looking forward, L5 estimates that Gamzio will reach 300,000 DAU in their social casino business division and 20,000 DAU in their Real-Money division in 12 months. These expectations should lead to $42,000,000 ($14,000,000 per 100,000 DAU) in value for the social gaming division and $7,000,000 (under 1x annualized revenue) for the Real-Money division and an expected total marketcap of $49,000,000 or a price/share of $0.84/share using Gamzio’s shares 58.18 Million share outstanding. Given that Gamzio still has to perform to reach these expectations, L5 is utilizing a 40% execution risk discount, which creates our price/share target of $0.50/share. As management performs, L5’s price/share target could move towards the $0.84/share number.

Investment Merits:
1) $21 Billion Fast Growing Acquisitive Market: The Social Casino segment is the fastest growing segment of the Mobile App market, with 38% growth in 2013. The Mobile Game market is expected to grow to over $28 billion in 2016. Less than 1% penetration of this market will make Gamzio a very valuable company and Gamzio is poised to make a splash in this market with its strong portfolio of games across several platforms.

2) Strong and Fun Game Offerings on Multiple Platforms: Gamzio has produced a strong portfolio of games in a short amount of time. Slots-O-Luck Adventure has 11 unique Vegas style slot games that are entertaining and well designed with a realistic payout algorithm. Gamzio management claims that the retention and play rates exceed industry averages and management believes that the game will continue to see success as they begin implementing marketing strategies. The Go-Go Casino relaunch will further cement Gamzio as a serious player in the Social Casino market.

3) 400,000 Users with Plans for Aggressive Organic Growth and Acquisitions: Gamzio’s acquisition of Go-Go Casino gave the company 361,000 users in a game that was not up to Gamzio’s standards of a Vegas style product. Gamzio is redesigning and updating Go-Go Casino to improve the look, play and game offerings of Go-Go Casino. Gamzio will be able to market the full suite of Gamzio’s products to all the current Go-Go Casino users and move many to becoming Daily Active Users of multiple Gamzio games. The value of the Go-Go acquisition is yet to be seen, but it should be quantified over the next several quarters. The model of the Go-Go Casino acquisition is one that Gamzio can replicate over and over using their shares as currency and growing their DAU’s and MAU’s in the process, thereby making Gamzio a more attractive takeover candidate.

4) Entrance into Real-Money Mobile Casino Space: Gamzio’s partnering with Cashbet and the subsequent launch of Island Casino Adventure in the London App Store moves Gamzio into the very lucrative market of Real-Money Games. As Gamzio begins to market to prospective users, the Company has the potential to receive upsized revenues from this property. Gamzio also has plans to expand Casino Island Adventure to add additional games in the near future, further growing their revenue potential. Gamzio can use this model globally where Real-Money mobile gaming is legal. Additionally Gamzio will have a platform in place if Real-Money Mobile gaming is legalized in the US giving Gamzio the opportunity to be one of the first movers domestically. This segment of Gamzio’s business has the potential to be a real value driver for shareholders.

The two-part combined Analyst report with October-2014 upgrade may be found at http://sectornewswire.com/AnalystsReport-GAMZ-23-09-14.pdf online.

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Contact information:
Simon Levinson

Market Equities Research Group

s.levinson@marketequitiesresearch.com

SOURCE: Gamzio Mobile, Inc.