Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Friday, JMP Securities analyst Jordan Bender increased the price target for Bragg Gaming Group Inc. (NASDAQ: BRAG) to $6.00, up from the previous target of $5.00, while reaffirming a Market Outperform rating for the company’s stock. According to InvestingPro analysis, Bragg Gaming appears undervalued at its current market capitalization of $110.5 million, with analysts setting targets ranging from $6.00 to $11.00.
Bragg Gaming reported quarterly revenue of €27 million, which was a slight 1% dip compared to consensus estimates. However, the company’s EBITDA of €4.7 million exceeded the anticipated €4.3 million, driven by a robust margin of 17%, which was 155 basis points higher than consensus expectations. The company has maintained strong momentum, achieving 9.07% revenue growth over the last twelve months.
The company’s revenue from aggregated third-party content saw an 8% year-over-year increase, while its exclusive third-party content grew by 11%. Notably, Bragg Gaming’s highest margin segment, proprietary content, surged by 45% compared to the previous year. This growth highlights the successful shift towards offering more high-margin products.
The improvement in product mix has also led to a significant increase in gross margins, which reached 58%, up by 650 basis points year-over-year. This substantial margin expansion was the key factor behind the company’s earnings outperformance relative to market expectations. InvestingPro data shows the company maintains a healthy gross profit margin of 53% and has earned a "GOOD" Financial Health score, with particularly strong ratings in cash flow management.
Bragg Gaming had previously announced its 2024 results and provided guidance for 2025 on January 29, 2024. The company’s guidance for the upcoming year remains unchanged following this announcement.
In other recent news, Bragg Gaming Group has reported preliminary results for 2024, showing a projected revenue increase of at least 9%, reaching EUR 102 million, with an adjusted EBITDA expected to grow by 1% to EUR 15.4 million. The company has also provided guidance for 2025, forecasting revenue between EUR 117.5 million and EUR 123.0 million, indicating double-digit growth, alongside an adjusted EBITDA projected to be between EUR 19.0 million and EUR 21.5 million. In a strategic move, Bragg Gaming has announced a partnership with Caesars (NASDAQ:CZR) Entertainment, focusing on the U.S. and Canada markets, which is anticipated to drive significant growth in 2025. This partnership includes the use of Bragg’s Remote Gaming Server technology and other platforms, enhancing Bragg’s role as a technology partner.
Benchmark recently raised the price target for Bragg Gaming to $6.00, maintaining a Speculative Buy rating, following the company’s consistent growth and strategic focus on proprietary content. JMP Securities has also reaffirmed their Market Outperform rating with a $5.00 price target, highlighting Bragg Gaming’s strategy to nearly double its game title output in 2025 through its proprietary studios. This move is expected to enhance revenue growth and profit margins. Bragg Gaming’s strategic initiatives, including expanding content distribution and leveraging technological advancements like the FUZE™ platform, are expected to support its growth trajectory. The company’s management has expressed confidence in these developments, noting strategic investments in proprietary content and engagement features as key growth drivers.
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