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On Tuesday, Canaccord Genuity maintained a Buy rating on SGHC Limited (NYSE: SGHC), currently trading at $7.54 with a market capitalization of $3.79 billion, and increased its price target from $10.00 to $11.00. The adjustment follows Super Group’s announcement of robust fourth-quarter earnings, which marked a record performance for the company in terms of revenue and profits. InvestingPro analysis reveals the company maintains strong financial health with a "GOOD" overall rating.
Super Group’s impressive results were widespread, spanning various regions and market segments. The company saw significant growth in Africa, which became its largest and fastest-growing region during the quarter. With revenue growth of 10.78% and a healthy gross profit margin of 44.14%, this success was attributed to Super Group’s tailored product offerings and marketing strategies. Additionally, the company experienced positive sports outcomes and increased user engagement in Europe, Canada, and New Zealand.
The recent launch in Botswana expanded Super Group’s African presence to eight countries, indicating a continued focus on growth across the continent. Super Group also provided revenue and EBITDA guidance for FY25, aligning with market expectations. The management emphasized a strategic approach to marketing investments, targeting key growth markets and countries with a clear path to profitability.
SGHC shares have seen a considerable increase, delivering an impressive 169.76% return over the past year. This uptrend is due to consistent strong performance leading to positive revisions in earnings estimates. According to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US equities, the stock appears fairly valued based on its proprietary Fair Value calculations. Canaccord Genuity’s analyst highlighted the company’s valuation as reasonable, with disciplined execution of its business strategy anticipated to drive further growth and margin expansion in 2025 and beyond.
In other recent news, SGHC Limited reported substantial growth in its Q4 2024 earnings, with revenue outside the U.S. rising by 58% year-over-year to €487 million. The company also saw a significant increase in adjusted EBITDA, which surged 152% to €129 million, demonstrating notable margin expansion. SGHC Limited maintained a strong cash position with €356 million and no debt, reflecting its solid financial health. Benchmark analysts responded to this performance by raising their price target for SGHC Limited to $12.00, maintaining a Buy rating, and highlighting the company’s potential for double-digit revenue and AEBITDA growth in 2025. Super Group, SGHC’s parent company, has strategically shifted its focus in the U.S. market towards an iGaming-only model, which is expected to reduce investment losses and improve profitability. The company has also announced an increased quarterly dividend to $0.04, with the potential for a special dividend in 2025. SGHC Limited’s strategic efforts to expand its iGaming presence in key markets like Africa, Europe, and Canada have been effective, despite regulatory challenges in regions such as Germany. Looking ahead, SGHC targets over €1.9 billion in total group revenue for 2025, with plans to explore M&A opportunities in complementary regions.
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