On Friday, Truist Securities updated its financial outlook for shares of Gambling.com Group Ltd. (NASDAQ: GAMB), increasing the price target to $16.00, up from the previous target of $13.00. The firm has maintained its Buy rating on the company's shares. The adjustment follows Gambling.com's third-quarter performance, which surpassed expectations due to robust growth in new depositing customers (NDCs) and sustained strength in North America.
The company also uplifted its 2024 guidance, which has been raised once more, signaling management's confidence in achieving its $100 million annual EBITDA target before considering any potential mergers and acquisitions benefits. Truist Securities highlighted Gambling.com's standout performance in a sector where competitors have faced challenges, expressing confidence in the company's market position and growth prospects.
The revised stock price target is now based on a 10-times multiple of the company's projected 2025 EBITDA, reflecting Gambling.com's growth profile and its standing relative to peers. The analyst's estimates for the company's 2024 EBITDA have been increased by approximately 6% to align with the mid-point of the company's guidance, alongside minor adjustments to the 2025 EBITDA estimates.
In the statement provided, the analyst praised Gambling.com's resilience and ability to differentiate itself in a competitive landscape. The reiteration of the Buy rating and the raised price target underscores a positive outlook for the company's financial future.
In other recent news, Gambling.com Group has reported a record Q3 revenue of $32.1 million, marking a 37% increase from the same period last year. The company also saw a significant rise in its adjusted EBITDA, which reached $12.6 million, a 108% increase year-over-year. These results are primarily attributed to a diversified market presence and a strategic focus on casino operations.
In light of these developments, Gambling.com has revised its full-year revenue forecast to between $125 million and $127 million and raised its adjusted EBITDA outlook to a range of $46.5 million to $48.5 million. The company has also repurchased over 8% of its outstanding shares since November 2022.
Despite challenges in North America, Gambling.com is confident in its growth strategy and plans to enter new markets in 2025, such as Colombia and Peru. The company also anticipates developments in the regulatory landscape in Brazil. However, it is important to note that customer acquisition is still below potential despite the integration of the Freebets acquisition.
Lastly, the company's CEO, Charles Gillespie, discussed the company's growth plans, specifically in the Americas, and the intention to enter new markets in 2025. He also expressed optimism for New York's iGaming market and potential progress in Texas.
InvestingPro Insights
Gambling.com Group's recent performance aligns with several key metrics and insights from InvestingPro. The company's market cap stands at $451.31 million, with a P/E ratio of 13.27, indicating a potentially attractive valuation relative to its earnings. This is particularly noteworthy given the company's impressive revenue growth of 27.63% over the last twelve months, which supports Truist Securities' optimistic outlook.
InvestingPro Tips highlight that Gambling.com has been aggressively buying back shares, a strategy that often signals management's confidence in the company's future prospects. Additionally, the company boasts impressive gross profit margins, which is reflected in the InvestingPro data showing a gross profit margin of 91.61% for the last twelve months. This exceptional profitability aligns with the analyst's positive view on the company's market position and growth potential.
The strong financial performance is further evidenced by the company's EBITDA growth of 52.39% over the last twelve months, which supports the raised guidance and the analyst's increased EBITDA estimates. Moreover, InvestingPro Tips indicate that the company operates with a moderate level of debt and that cash flows can sufficiently cover interest payments, suggesting financial stability alongside growth.
For investors seeking more comprehensive insights, InvestingPro offers 12 additional tips for Gambling.com Group, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.