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On Wednesday, BTIG analysts sustained their Buy rating and $19.00 price target for Gambling.com Group Ltd. (NASDAQ: GAMB) shares. The firm’s positive stance comes after Gambling.com’s pre-announcement of fourth-quarter 2024 earnings, which exceeded both BTIG’s and the consensus estimates. The company’s impressive performance is reflected in its robust 91.6% gross profit margin and strong 27.6% revenue growth over the last twelve months. Analysts at BTIG highlighted the company’s strong performance in the iGaming sector, which accounts for over two-thirds of Gambling.com’s total revenue. According to InvestingPro analysis, the company maintains excellent financial health with 12 key investment tips available to subscribers. They noted the improving landscape for legal online gambling in the United States and the company’s success in gaining market share from competitors as key factors in the favorable outlook for Gambling.com’s core business.
The analysts also pointed to the December 2024 acquisition of OddsJam as a foundation for significant growth in Gambling.com’s aggregate EBITDA, which currently stands at $37.8 million. With a moderate debt-to-equity ratio of 0.24 and strong cash flows, the company is well-positioned for expansion. They mentioned that the potential for US iGaming market expansion and market share gains, along with the entry into the Missouri market, were not previously included in their financial projections. The report by BTIG includes details on the expectations for 2025 and 2026, as well as the potential revenue contributions from new markets in the US where iGaming becomes legalized.
According to BTIG’s analysis, even a low to mid-single-digit percentage of year one revenue contribution from each new state that legalizes iGaming could be significant for Gambling.com. They estimate that a 7% market penetration in Missouri, with customer acquisition costs of $200, could add $2-4 million of incremental revenue not accounted for in the 2025 guidance, which would be approximately 1-2% accretive to their estimate for that year.
The full fourth-quarter 2024 results from Gambling.com are eagerly awaited by BTIG, as the analysts have stated that their estimates are currently under review. Trading at a P/E ratio of 19.9, InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value model. The firm’s report includes detailed financial forecasts and bridges to projected revenue and EBITDA, reinforcing their confidence in Gambling.com’s near and medium-term fundamental prospects. For comprehensive insights and access to the full Pro Research Report covering GAMB and 1,400+ other stocks, consider an InvestingPro subscription.
In other recent news, Gambling.com Group Ltd. has been the focus of multiple analyst updates and strategic developments. The company announced the acquisition of Odds Holdings, a move that has prompted several analysts, including those from Truist Securities and Craig-Hallum, to raise their price targets for the company to $18, maintaining a Buy rating. This acquisition is expected to contribute significantly to Gambling.com’s financial growth, with a projected 20% increase in EBITDA by 2025 and a potential doubling by 2026, according to management’s expectations.
Benchmark analysts also initiated coverage on Gambling.com, assigning a Buy rating and a $16 price target, highlighting the company’s strong position in digital marketing within the online gambling industry. Stifel has increased its price target for the company to $17, citing the strategic nature of the Odds Holdings acquisition, which involves an initial $80 million payment and potential earnouts based on future performance. The acquisition is anticipated to enhance Gambling.com’s offerings and provide significant synergies, with Odds Holdings’ team set to join Gambling.com to ensure a smooth integration.
The company’s recent financial performance, characterized by over 20% revenue growth and high EBITDA margins, has been a key factor in the positive outlook from analysts. Gambling.com’s scalable business model and proprietary platforms, such as Gambling.com and RotoWire.com, are viewed as vital assets driving growth. Investors are advised to monitor new regulatory changes and the performance of recent acquisitions as critical factors influencing Gambling.com’s progress in the competitive iGaming landscape.
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