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Investing.com - JMP Securities has reiterated its Market Outperform rating and $12.00 price target on Inspired Entertainment Inc (NASDAQ:INSE), which currently trades at $9.14 with a modest P/E ratio of 4.2x. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value, highlighting the company’s progress toward its EBITDA margin goals.
The firm notes that Inspired Entertainment set targets over a year ago to achieve EBITDA margins exceeding 40% through restructuring actions and the sale of its low-margin UK business. The company already demonstrates strong operational efficiency with an impressive gross profit margin of 70%, according to InvestingPro data.
JMP points to several restructuring charges reported by the company in the first half of 2025 as evidence that improvement plans are advancing as expected.
The firm’s updated model projects 42% margins for Inspired Entertainment in 2026, suggesting the company is on track to meet its stated objectives.
JMP has included only approximately $2 million of "operational improvements" in its updated financial model, indicating its $110 million estimate (representing 7% same-store growth) appears achievable if the company successfully executes its strategy.
In other recent news, Inspired Entertainment Inc. reported its Q2 2025 earnings, revealing a notable shortfall in earnings per share (EPS) expectations. The company recorded an EPS of -$0.19, which was significantly below the anticipated $0.15. However, revenue figures were more positive, reaching $80.3 million and surpassing the forecasted $75.47 million by 6.4%. In addition to financial results, Inspired Entertainment announced the sale of its UK holiday parks business and certain leisure assets to GENDA Inc. for approximately £18.6 million ($25.1 million) in cash. This transaction involves managing over 11,000 amusement and gaming machines across various entertainment venues in the UK. Moreover, the company launched V-Play Football Brazil with EstrelaBet, a Brazilian gaming company, utilizing Altenar’s sportsbook platform. This new virtual sports product is tailored specifically for the Brazilian market, offering high-frequency football match simulations. These developments reflect Inspired Entertainment’s ongoing strategic initiatives.
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