In a Thursday investor note, Jefferies Equity Research analyst David Katz charted a promising future for gambling.com Group. The performance-marketing and sports-betting media company trades on the NASDAQ.
Katz and his team met with Gambling Group executives on September 3 and liked what they heard. He wrote that the discussion supported his view that the company “remains on plan” for this year and will outgrow the United States digital marketplace in the long term.
He penned, “We believe that its core expertise and quality growth matter more than scale in the affiliate business, particularly in the increasingly competitive U.S. market.” Katz reiterated his $18-per-share price target for GAMB stock, which was trading at $10.10 at the time.
Jefferies liked the fundamentals of Gambling Group, which was noted to be growing business in an increasingly competitive marketplace, both in Europe and the U.S. Katz noted that Gambling Group is continuing to increase its online sports betting (OSB) custom, “although igaming proliferation would provide greater leverage to growth acceleration for GAMB.”
Katz was also pleased with Gambling Group being less reliant on its five top customers, formerly responsible for 51 percent of its revenue. They now comprise no more than 39 percent of the revenue mix.
It was observed that a change in the company’s search policy had been guided to curb earnings by as much as nine percent, but that number had proven to be conservative. Management “notes the initial uncertainty should be passed and its execution should remain solid and stable going forward.”
Cash-flow growth was predicted to be in the low double digits, with the prospect of immediately remunerative tuck-in acquisitions guiding toward eventual cash flow of $100 million.
“Given what we expect should be outperformance of demand from the U.S. OSB market through the remainder of the year, we remain comfortable with our high-end-of-the-range estimates,” Katz added. He projected third-quarter revenue of $31 million and cash flow of $10.2 million, compared to Wall Street’s consensus of $30.4 million in revenue and $10.6 million cash flow.
Longer-term, he forecast fiscal-year revenue of $125 million and cash flow of $44.6 million. Those numbers were slightly divergent from Wall Street expectations of $124.8 million and $45.2 million, but “all within the guidance range.”
Looking ahead to 2025, Katz prognosticated revenue in the amount of $141.1 million and cash flow to the tune of $57.1 million. He noted that those numbers put him 1.5 percent above Wall Street’s revenue estimate and 6.8 percent higher than its cash flow.
