Cardiff Oncology shares plunge after Q2 earnings miss
On Friday, Truist Securities adjusted its outlook on Gambling.com Group Ltd. (NASDAQ: GAMB), increasing the price target to $13 from $12, while sustaining a Buy rating on the shares. The revision comes after the company reported a strong second quarter, with adjusted EBITDA surpassing both the firm's and the Street's expectations.
This performance was attributed to robust growth in new depositing customers (NDC) and a resilient North American business.
The company has also revised its 2024 guidance upwards, after a previous reduction in the first quarter of 2024. This change in forecast is due to the lesser than anticipated impact from Google (NASDAQ:GOOGL)'s search ranking methodology update. Management at Gambling.com remains confident in achieving its goal of $100 million in annual EBITDA, although the exact timeline for reaching this target has not been specified.
Truist Securities' optimism is further buoyed by the company's recent acquisition of Freebets.com, its organic growth, and the potential for future mergers and acquisitions. The firm has increased its 2024 EBITDA estimates by 7% to the midpoint of the guidance, while keeping its fiscal year 2025 estimates unchanged.
The price target uplift to $13 reflects a positive stance on Gambling.com's current operations and future prospects, as the company continues to execute its growth strategy in the online gambling industry.
In other recent news, Gambling.com Group reported a record Q2 revenue of $30.5 million, marking an 18% increase year-over-year. The company also noted a 19% rise in adjusted EBITDA to $11.2 million. This robust performance led the firm to raise its full-year revenue and adjusted EBITDA guidance, projecting a 15% revenue growth and a 24% adjusted EBITDA growth. These developments follow the acquisition of Freebets.com, which is expected to contribute to higher growth rates in 2025.
CEO Charles Gillespie attributed the growth to the company's adaptability and the digitization of the gambling and advertising industries. He also mentioned the company's repurchase of over 6% of its outstanding shares and active consideration of M&A opportunities. Gillespie expressed confidence in exceeding revenue expectations from the Freebets.com acquisition and highlighted the firm's long-term goal of reaching $100 million in adjusted EBITDA.
In terms of geographic expansion, Gambling.com Group anticipates modest growth in North America and significant growth in the UK, Ireland, and other European markets. However, potential tax rate increases in the US could pose challenges. These are among the recent developments at Gambling.com Group.
InvestingPro Insights
Following the positive outlook from Truist Securities, real-time data and InvestingPro tips further illuminate the financial landscape of Gambling.com Group Ltd. (NASDAQ: GAMB). The company boasts an impressive gross profit margin of 90.59% in the last twelve months as of Q2 2024, underscoring its ability to efficiently manage costs relative to revenue. Additionally, Gambling.com has demonstrated significant returns, with a 23.16% increase over the last week, and a robust 39.03% over the last three months, indicating strong recent performance in the market.
InvestingPro Tips highlight that management's aggressive share buyback strategy and the company's operation with a moderate level of debt may be appealing to investors looking for companies with prudent capital allocation policies and manageable financial leverage. These strategic moves could be key factors contributing to the company's upward trajectory. For those interested in exploring further, there are additional InvestingPro Tips available, providing deeper insights into Gambling.com's financial health and market position.
Key InvestingPro Data metrics include a market capitalization of $402.46 million USD, a forward-looking P/E ratio of 11.99, and a PEG ratio that suggests the stock is potentially undervalued with respect to its earnings growth, listed at a mere 0.04. These metrics, combined with the company's adjusted EBITDA growth of 19.8%, paint a picture of a company on a solid financial footing with promising growth prospects.
For investors seeking a more comprehensive analysis, additional InvestingPro Tips are available, which can provide a well-rounded view of Gambling.com's market potential and investment profile.
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