Playtika maintains buy rating, keeps stock target post-acquisition

On Thursday, Playtika Holding Corp (NASDAQ:PLTK) shares received confirmation of a maintained Buy rating and a $20.00 price target from TD Cowen. The endorsement comes as Playtika announces a definitive agreement to acquire the Tel Aviv-based mobile gaming company SuperPlay. The transaction is noted for its perceived value at approximately two times SuperPlay's run-rate revenue before earnouts.

Playtika's strategic move to purchase SuperPlay is seen as a positive step, with the acquisition terms suggesting a cost-effective expansion. Alongside the acquisition news, Playtika has reassured its investors that it will continue with its existing dividend and share repurchase strategies, signaling confidence in its financial planning and stability.

The gaming company's management team is scheduled to provide more details and discuss the implications of the SuperPlay acquisition in a call set for tomorrow morning at 8:30 a.m. Eastern Standard Time. This call is anticipated to offer investors and analysts further insights into how this acquisition aligns with Playtika's growth objectives.

Investors and market watchers are keeping a close eye on Playtika as the company navigates through its latest expansion move. The acquisition is expected to enhance Playtika's portfolio and market presence in the mobile gaming industry.

In summary, Playtika Holding Corp is proceeding with its planned acquisition of SuperPlay, while maintaining its financial return programs. The upcoming call will likely shed more light on the company's future direction following this strategic acquisition.

InvestingPro Insights

As Playtika Holding Corp (NASDAQ:PLTK) continues to make strategic moves with the acquisition of SuperPlay, real-time data and insights from InvestingPro provide an additional layer of analysis for investors considering the company's stock. According to InvestingPro, the valuation of Playtika implies a strong free cash flow yield, which is a positive indicator for investors looking for companies that can generate cash efficiently. Furthermore, Playtika's liquid assets exceed its short-term obligations, suggesting a solid liquidity position that can support its acquisition strategies and existing shareholder return programs.

InvestingPro Data shows a market capitalization of $2.93 billion and a Price/Earnings (P/E) ratio of 13.78, which adjusts to a lower 11.51 when looking at the last twelve months as of Q2 2024. This lower adjusted P/E ratio can indicate that the stock might be undervalued compared to its earnings. The Gross Profit Margin for the same period stands at a robust 72.52%, underlining the company's ability to retain a significant portion of sales as gross profit.

For investors considering Playtika's growth prospects, it is noteworthy that analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. These InvestingPro Tips, along with additional insights available on InvestingPro, can help investors make more informed decisions. In fact, there are even more tips available on InvestingPro for those interested in a deeper dive into Playtika's financial health and future outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.