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Texas Capital Securities initiated coverage on Gambling.com Group Ltd. (NASDAQ:GAMB) with a buy rating and a $17.00 price target on Wednesday, representing nearly 37% upside from the current price of $12.40. According to InvestingPro data, analyst targets range from $17 to $20, suggesting strong upside potential.
The firm identified Gambling.com as the "go-to affiliate/performance marketing and services company focused on the online wagering industry" that is also emerging as a data and service provider to the online sports sector. The company’s business model has proven highly efficient, with InvestingPro data showing an impressive 94.5% gross profit margin and 26% return on equity.
Texas Capital highlighted that Gambling.com’s technology and services are supported by "visible, multi-year global online wagering Total (EPA:TTEF) Addressable Market (TAM) growth," and predicted the company’s EBITDA would outpace industry TAM growth.
This outperformance is expected to be driven by several factors including maturation of the B2C marketing structure, an increase of brands among operators, and a longer-term acceleration of new iCasino territories, according to the research note.
The firm also pointed to Gambling.com’s recent acquisition of data provider Odds Holdings as an underappreciated factor that increases its recurring revenue mix and potentially helps address "a key B2C issue of hold volatility."
In other recent news, Gambling.com Group Ltd. reported first-quarter 2025 earnings that exceeded analyst expectations, with revenue reaching a record $40.6 million and adjusted earnings per share of $0.46, surpassing the consensus estimate of $0.24. The company’s adjusted EBITDA rose by 56% to $15.9 million, reflecting a margin improvement from 35% to 39%. Gambling.com reiterated its full-year 2025 guidance, projecting revenue between $170 million and $174 million and adjusted EBITDA of $67 million to $69 million. Macquarie maintained its Outperform rating but adjusted its price target from $19 to $18, while Benchmark and Stifel both upheld their Buy ratings with an $18 target. The company saw significant growth in sports data services, attributed to the acquisitions of OddsJam and OpticOdds. Management noted that 24% of first-quarter revenues were derived from recurring subscriptions, signaling a strategic shift towards more stable revenue streams. Looking forward, Gambling.com anticipates growth opportunities in Missouri and Alberta, alongside potential market-share gains in the UK and European markets.
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