Stifel maintains Hold on PlayAGS stock with $12.50 target

On Friday, Stifel analysts maintained a Hold rating on PlayAGS, Inc. (NYSE:AGS) shares, with a consistent price target of $12.50. The decision follows the company’s release of its fourth-quarter financial results for 2024, which were recently filed in its 10-K on March 6, 2025. According to InvestingPro data, the company has demonstrated solid performance with a 12.2% revenue growth and impressive 70.1% gross profit margins in the last twelve months. Stifel’s analyst, Jeffrey Stantial, adjusted the firm’s model to account for the financial disclosures, resulting in a slight increase in the projected Adjusted EBITDA for 2025 and 2026. The revision reflects stronger-than-expected performance in the company’s Interactive segment.

Stantial remarked on the ongoing acquisition of PlayAGS by Brightstar Capital Partners (WA:CPAP), a transaction in which shareholders are set to receive $12.50 per share in cash. He noted that the acquisition is anticipated to close as planned, providing the basis for the reiterated price target. The current trading price of PlayAGS shares presents a roughly 4% gross spread to the offer price, which underpins the Hold rating. InvestingPro analysis shows the company maintains a strong financial position with a "GREAT" overall health score and a healthy current ratio of 3.35, indicating solid liquidity.

The analyst’s commentary highlights that the updated estimates for Adjusted EBITDA are driven by momentum in the Interactive division of PlayAGS. With last twelve months EBITDA of $154.19 million, the company has shown strong operational performance. Despite this positive adjustment, the Hold rating suggests that Stifel analysts see the stock as fairly valued at the current price, especially in light of the pending acquisition. Discover more insights about PlayAGS and access comprehensive analysis through the Pro Research Report, available exclusively on InvestingPro.

PlayAGS’s financial performance and the acquisition by Brightstar Capital Partners are central to Stifel’s analysis. The firm’s price target aligns with the offer from Brightstar, indicating that the market has effectively priced in the expected outcome of the deal.

Stantial’s statement encapsulates Stifel’s stance: "We are fine-tuning our model to reflect 4Q24 financials disclosed in AGS’s 10-K filed 3/6, lifting 2025/26E Adj. EBITDA +1% on Interactive momentum. We continue to forecast the acquisition by Brightstar Capital Partners for $12.50/share in cash closing as structured. As such, and with shares trading at a ~4% gross spread to offer, we maintain our Hold rating with our $12.50 target price inline with the Brightstar cash offer."

In other recent news, PlayAGS, Inc. has made significant progress in its acquisition by Brightstar Capital Partners. The mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired, allowing the proposed $12.50 per share cash acquisition to move forward. This transaction, anticipated to close in the second half of 2025, is still contingent upon customary closing conditions and regulatory approvals. The expiration of the antitrust waiting period suggests no further regulatory barriers to the deal. Brightstar Capital Partners, a private equity firm, focuses on investments in the middle market and has over $4 billion in assets under management. This development is a crucial step in the acquisition process, indicating a clear path forward for the transaction. The deal remains subject to various risks and uncertainties, including the potential for delays or failure to obtain necessary stockholder approval.

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