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Investing.com - BWS Financial initiated coverage on Inspired Entertainment Inc (NASDAQ:INSE) with a Buy rating and a $20.00 price target on Monday. According to InvestingPro data, the stock currently trades at $8.87, with analysts’ targets ranging from $10 to $14, suggesting significant upside potential.
The research firm highlighted Inspired Entertainment’s position in the evolving online gambling industry, noting the company has developed Virtual Sports and hybrid dealer solutions that expand online gaming opportunities for its customers. The company maintains impressive gross profit margins of nearly 70%, according to InvestingPro data.
BWS Financial emphasized that Inspired Entertainment faces no competition in its Virtual Sports segment, while its hybrid dealers address regulatory requirements regarding the location of live dealers.
The firm stated these offerings should help the company overcome slowing dynamics in the physical gaming business, a trend that was apparent in first quarter results and should become more visible going forward.
BWS Financial expects second quarter results to serve as a catalyst for its investment thesis on Inspired Entertainment.
In other recent news, Inspired Entertainment reported its Q1 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.13, surpassing the anticipated -$0.04. However, the company fell short on revenue, reporting $60.4 million against the forecasted $68.4 million. Additionally, Inspired Entertainment has finalized a private placement of £270 million in senior secured notes due 2030, alongside a new £17.8 million revolving credit facility, to refinance existing debt and support corporate functions. The company also launched its V-Play Football Brazil in partnership with Kaizen Gaming, marking a significant expansion into the Brazilian market. Furthermore, Inspired Entertainment has introduced the Hybrid Dealer Roulette 4-Ball Extra Bet game in the U.S. through a partnership with BetMGM. Analysts noted the company’s strong performance in its interactive business segment, which showed a 49% revenue increase. Despite these developments, regulatory changes in Brazil and shifts in the UK market have posed challenges. Inspired Entertainment’s efforts to expand its digital offerings and refinance its debt are seen as strategic moves to bolster its financial position.
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