Craig-Hallum sets $12 target for SGHC stock with Buy rating

Monday, SGHC Limited (NYSE: SGHC), currently trading at $8.41, received a positive outlook from Craig-Hallum as the firm initiated coverage on the company’s shares with a Buy rating and a price target of $12.00. The research firm highlighted SGHC’s position as a global online gambling leader, particularly noting its dominance in the underappreciated African market. This aligns with the strong analyst consensus, as tracked by InvestingPro, which shows a highly favorable 1.2 rating.

SGHC, recognized for its online gambling operations, has made strategic moves to right-size its operations and adapt to regulatory changes, especially in Canada. The company strategically withdrew from competitive and uneconomic markets, which has now set the stage for a return to growth after experiencing declines in adjusted EBITDA in the years 2022 and 2023. The company’s solid financial foundation is evident in its impressive 50.41% gross margin and healthy debt-to-equity ratio of 0.11, according to InvestingPro data.

The analyst from Craig-Hallum pointed out the company’s strong underlying fundamentals in its core markets, which signal a fundamental inflection point for SGHC. This change in trajectory is seen as not fully recognized by the market, owing to the limited float of SGHC shares and the challenges the company faced in its initial years as a publicly-traded entity.

The firm’s endorsement comes as a significant development for SGHC, which aims to capitalize on the burgeoning multi-billion dollar total addressable market (TAM) in online gambling, with Africa being a central focus. The analyst’s comments reflect confidence in SGHC’s ability to navigate the complexities of the industry and emerge as a growth-oriented company.

SGHC’s recent performance and strategic decisions appear to have laid the groundwork for renewed investor interest, as suggested by the initiation of coverage with a Buy rating by Craig-Hallum. The firm’s $12.00 price target reflects an anticipation of SGHC’s continued progress and potential in the competitive online gambling market. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this rapidly growing company that has delivered an impressive 147.37% return over the past year.

In other recent news, SGHC Limited has demonstrated strong financial performance, with multiple firms maintaining a positive outlook on the company. Benchmark analysts have upheld their Buy rating and increased their price target to $12.00 following SGHC’s robust first-quarter results in 2025, where the company surpassed consensus estimates for revenue and adjusted EBITDA. Canaccord Genuity also raised its price target to $11.00, citing SGHC’s record-breaking fourth-quarter earnings and strategic marketing efforts in Africa, Europe, Canada, and New Zealand. BTIG initiated coverage with a Buy rating and a $9.00 price target, acknowledging SGHC’s significant revenue from online casino operations and its presence in emerging markets like Africa and Canada.

The analysts have noted SGHC’s strategic shift towards an iGaming-only model in the U.S., which is expected to enhance profitability by reducing investment losses. Benchmark has highlighted the company’s operational efficiency and solid execution, particularly in its non-U.S. operations, which have significantly contributed to profitability. SGHC’s management has emphasized high-margin growth in Africa and increased market share in the U.K. and Canada. The company’s strong cash reserves and strategic capital allocation, including higher dividends, further underscore its potential for substantial growth.

Additionally, SGHC’s marketing efficiencies and operational streamlining have been key factors in enhancing margin performance. Despite potential short-term revenue compression due to regulatory changes, analysts remain confident in SGHC’s ability to navigate these challenges. The firm’s positive outlook reflects confidence in SGHC’s growth opportunities and strategic direction for the remainder of 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.