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PlayStudios (NASDAQ:MYPS) has maintained its Outperform stock rating, according to Oppenheimer analysts, who also reiterated a $5.00 price target for the company. This decision follows PlayStudios’ announcement of its fourth-quarter 2024 performance, which revealed mixed results. The company reported revenues of $67.8 million and adjusted EBITDA of $12.5 million. These figures slightly missed the consensus expectations, which were set at $67.5 million for revenue and $13.5 million for adjusted EBITDA.
Looking ahead, management at PlayStudios has provided guidance for the fiscal year 2025, projecting revenues of $260 million and adjusted EBITDA of $50 million. This forecast suggests a 10% year-over-year decline in revenue and a 19% EBITDA margin. The company maintains a strong gross profit margin of 75.1% and healthy financial position with a current ratio of 4.16. Notably, the company’s guidance does not include potential revenue from new initiatives such as sweepstakes and the launch of a new Tetris casual game, which are expected in the second half of 2025. These new ventures could contribute an additional $15 to $30 million to the company’s bottom line.
PlayStudios is preparing to roll out its sweepstakes offering in the upcoming quarters. The company also plans to launch a separate solution in the next few months, which will be progressively integrated into its existing product portfolio. InvestingPro analysis reveals that PlayStudios holds more cash than debt on its balance sheet, providing financial flexibility for these initiatives. Despite a challenging market environment with no immediate signs of recovery, certain PlayStudios titles, including Brainium, myVEGAS, and Pop!, have shown strong performance with double-digit increases in average revenue per daily active user (ARPDAU) on a year-over-year basis.
The overall market conditions for the gaming sector have been tough, with reduced revenue outlooks across the board due to a lack of market improvement. However, Oppenheimer analysts see potential in PlayStudios’ medium-term, company-specific catalysts, which could help the company return to a growth trajectory in the future. For deeper insights into PlayStudios’ financial health and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Playstudios Inc reported its fourth-quarter 2024 financial results, which highlighted a challenging period for the company. Earnings per share (EPS) were reported at -$0.18, missing the forecast of -$0.09. Revenue also slightly missed expectations, coming in at $67.8 million compared to the anticipated $67.83 million. The company’s revenue for the quarter declined by 12% year-over-year, and the full-year 2024 revenue decreased by 7% compared to 2023. Playstudios has been navigating structural shifts in the social casino market and cautious consumer spending, which have impacted its financial performance. The company is focusing on new initiatives, such as sweepstakes and a Tetris game, to drive growth. Additionally, workforce reductions and operational consolidations were implemented to enhance efficiency. Despite these challenges, Playstudios has provided revenue guidance for 2025, estimating between $250 million and $270 million, with expectations of adjusted EBITDA ranging from $45 million to $55 million.
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