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Investing.com - Citizens JMP lowered its price target on Bragg Gaming Group Inc. (NASDAQ:BRAG) to $4.00 from $6.00 on Thursday, while maintaining a Market Outperform rating on the stock. The gaming company, currently trading at $3.05 with a market capitalization of $76.6 million, has seen its shares decline nearly 31% over the past six months, according to InvestingPro data.
The firm cited Bragg’s shift toward higher-margin content offerings as a positive development that has been overlooked amid the company’s fluctuating performance. Since 2021, proprietary content has increased from 9% of total revenue to 17% in the trailing twelve months. This strategy appears to be working, with InvestingPro data showing a healthy gross profit margin of 54.44% and revenue growth of 9.76% over the last twelve months.
Citizens JMP projects EBITDA margins of 15.8% in 2025 and further expansion to 16.2% in 2026, with the company expected to generate €6.5 million of free cash flow over that period. The firm estimates Bragg will be cash flow positive in each of the next three years.
The new price target is based on 5.5x the firm’s 2027 EBITDA estimate and 12x its 2027 free cash flow forecast, adjusted from previous calculations based on 2026 estimates.
Citizens JMP noted that Bragg shares currently trade at 5.2x its 2026 EBITDA estimate, compared to international online gaming companies at 6.9x, suggesting the current discount is unwarranted. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, with additional ProTips and detailed valuation metrics available to subscribers.
In other recent news, Bragg Gaming Group reported its Q2 2025 earnings, revealing a mixed financial performance. The company achieved a revenue of €26.1 million, marking a 4.9% increase compared to the previous year. However, this figure fell short of the anticipated €31.37 million, causing concern among investors. Earnings per share were reported at -€0.07, slightly missing the forecast of -€0.06, which resulted in a surprise of 16.67%. These results led to a notable reaction from the market, as investors expressed disappointment over the revenue shortfall. The earnings release has prompted analysts to reassess their projections, with some firms likely to adjust their outlooks based on the company’s recent performance. Bragg Gaming’s financial results and the subsequent market response underscore the challenges the company faces in meeting market expectations. These developments provide investors with critical insights into the company’s current financial health and market position.
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