Palantir a high-risk investment with ’a one-of-a-kind growth and margin model’
On Monday, Deutsche Bank (ETR:DBKGn)’s research team, led by analyst Simon Davies, adjusted the price target for Playtech (LON:PTEC) Plc. (PTECH:LN) (OTC: PYTCY), a technology company specializing in the gambling industry, to GBP4.17 from the previous GBP9.03. Despite the significant reduction in price target, the firm maintained a Buy rating on the company’s shares. According to InvestingPro data, the stock has shown remarkable strength, delivering a 111% return over the past year and maintaining a "GOOD" overall financial health score.
The revision follows Playtech’s recent announcement on April 30 of the completion of its €2.3 billion sale of Snaitech, which also included a substantial special dividend of €1.8 billion, or €5.73 per share. This dividend payout represented over 60% of Playtech’s market capitalization. Additionally, Playtech confirmed the redemption of the remaining €150 million of its €350 million senior secured notes due in March 2026. The shares of Playtech went ex-dividend on May 8. The company’s current market capitalization stands at $1.42 billion, with a healthy current ratio of 1.63 indicating strong liquidity position.
Deutsche Bank’s revised price target comes without any changes to the underlying forecasts for Playtech. The adjustment reflects the subtraction of the special dividend amount from the previous target. Davies noted that Playtech’s shares are currently trading at an adjusted 6x FY25E EV/EBITDA, which he considers undervalued for a B2B technology firm demonstrating double-digit growth with nearly 80% of its revenue now coming from regulated and taxed markets.
Playtech’s strategic direction appears solid, with a credible plan to achieve its medium-term target of €250-300 million EBITDA, which would imply an EV/EBITDA multiple of 3.7x compared to the €167.5 million forecasted for FY25E. The company’s focus on regulated markets and its growth trajectory seem to underpin Deutsche Bank’s continued positive outlook on the stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.