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Investing.com -- Playtika Holding Corp (NASDAQ:PLTK) shares soared 13.6% following an upgrade from BofA Securities, which shifted its rating to Buy from Underperform and raised the price objective to $6.50, up from the previous $6.00. This adjustment comes amid a recognition of the company’s robust profitability and dominant position within the mobile gaming industry.
BofA Securities analyst Omar Dessouky provided a positive outlook on the company’s financial health and market standing. "PLTK boasts the industry’s highest profitability (30% EBITDA margins), the industry’s largest DTC platform, and three of the largest and longest running franchises in mobile gaming history. It operates within the mature, but still growing mobile gaming industry, which we expect to grow at least 4% Y/Y for the foreseeable future," Dessouky remarked.
The upgrade also reflects confidence in the company’s financials, highlighting an all-time high next twelve months (NTM) free cash flow yield of 21% and an attractive dividend yield of 9%. These figures suggest that the stock may have limited downside risk, supported by the management’s track record of operational excellence.
Playtika’s stock movement today indicates investor agreement with the analyst’s perspective, particularly after concerns about the company’s growth trajectory and the preference for mobile ad network assets over publishers had previously contributed to share price volatility. The market’s response to BofA Securities’ reassessment underscores a renewed optimism in Playtika’s potential for growth and profitability within the evolving landscape of mobile gaming.
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