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Investing.com - Texas Capital Securities has lowered its price target on Gambling.com Group Ltd. (NASDAQ:GAMB) to $9.00 from $14.00 while maintaining a Buy rating on the stock. The new target aligns closely with InvestingPro’s Fair Value assessment, suggesting the stock remains undervalued despite trading at $4.86, down significantly from its previous close of $6.84.
The adjustment follows Gambling.com’s third-quarter 2025 performance, which missed consensus estimates with revenue and EBITDA coming in 5% and 3% below expectations, respectively. The company also reduced its 2025 EBITDA guidance for the second time this year. Despite these challenges, InvestingPro data shows the company maintains impressive gross profit margins of 94.02% and remains profitable over the last twelve months.
Texas Capital Securities noted that shares have declined approximately 25% following these developments, but maintained that concerns about the company’s core SEO business are overstated at the current valuation, while the strength of its data business remains understated. InvestingPro data reveals an even steeper decline of 53.16% over the past six months, with the stock now trading near its 52-week low. The current valuation implies a strong free cash flow yield of 19%, supporting Texas Capital’s view on potential undervaluation.
The research firm based its revised $9 price target on approximately 6.5x CY26E EV/EBITDA, down from the previous target of $14. Despite the reduction, Texas Capital Securities retained its Buy rating on the stock. Current EV/EBITDA stands at 7.07x based on last twelve months data, with a P/E ratio of 12.69, according to InvestingPro, which offers comprehensive analysis on over 1,400 US equities through its Pro Research Reports.
The firm indicated that consecutive quarters of guidance reductions mean that execution in the fourth quarter of 2025 and first quarter of 2026 will be necessary for sustained upward share price momentum. With the next earnings date set for November 13, 2025, investors can access additional insights through InvestingPro, which features 10 exclusive ProTips for Gambling.com Group and detailed financial health metrics to better evaluate the company’s prospects.
In other recent news, Gambling.com Group Ltd reported its third-quarter 2025 earnings, revealing mixed results. The company achieved an earnings per share (EPS) of $0.26, significantly surpassing analysts’ expectations of $0.17, marking a 52.94% increase. However, the revenue figures did not meet forecasts, with the company generating $38.98 million, falling short of the anticipated $41.25 million by 5.5%. Despite the positive EPS outcome, the revenue miss was a notable aspect for investors to consider. These recent developments highlight the company’s performance fluctuations in the third quarter. The earnings results have drawn attention from market analysts and investors alike. The financial community continues to monitor Gambling.com Group’s performance closely.
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