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Investing.com - JMP Securities initiated coverage on SGHC Limited (NYSE:SGHC), also known as Super Group, with a Market Outperform rating and a $15.00 price target on Monday. According to InvestingPro data, the company maintains a "GREAT" financial health score and has demonstrated impressive revenue growth of 31% in the last twelve months.
The firm views Super Group as one of the more attractive investments in the online gambling space, citing the company’s operations through two main brands: Betway for sports betting and casino games, and Spin for casino offerings.
JMP highlights that Super Group serves markets with high barriers to entry and leverages in-house technology platforms that specialize in local expertise, giving the company competitive advantages in its core segments.
The stock has already gained 287% from its 52-week low as investor focus has shifted back to Super Group’s core international business following its exit from the U.S. market, which had previously created an overhang on the shares.
Despite this significant price appreciation, JMP sees further upside potential driven by several catalysts, supporting its $15 price target, which represents 11 times the firm’s 2027 estimated EBITDA and 16 times projected free cash flow for that year.
In other recent news, Super Group has reported record revenue and adjusted EBITDA for the second quarter of 2025, prompting a raise in its full-year guidance for both revenue and adjusted EBITDA. The company expects its ex-U.S. revenue to exceed $2.0 billion, up from the previous guidance of $1.925 billion, and adjusted EBITDA to surpass $480 million, increased from the previously projected $457 million. Super Group plans to exit the U.S. iGaming market due to unfavorable regulatory developments, which include increased online gaming taxes in New Jersey. This decision follows a comprehensive review of capital allocation priorities, with the company anticipating one-time cash restructuring costs between $30 million and $40 million related to the exit.
Analyst firms have responded positively to these developments, with Benchmark raising its price target for Super Group to $14, Canaccord Genuity increasing it to $15, and BTIG setting it at $13, all while maintaining a Buy rating on the stock. These firms have highlighted the company’s strong Q2 results and improved FY25 outlook as key drivers for their revised assessments. Additionally, Super Group shareholders have approved all 11 resolutions at the company’s 2025 Annual Meeting, including the reappointment of board members and the authorization for market acquisitions of its own shares. The company plans to provide a full second-quarter update in August and will present its longer-term outlook at an Investor Day scheduled for September 18, 2025, in London.
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