Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
IGT wins bid for Italian Lotto
Barry Jonas of Truist Securites May 19 looked at IGT’s rebid to service the Italian Lotto
Jonas sees IGT’s deal as “potentially removing what had been a clear investor overhang around losing IGT’s largest contract representing over a third of reported EBITDA. Recall, IGT’s nine-year concession ends later this year and it was competing for Flutter for a new nine-year concession. While we think the shares should be up today overall, the new €2.23 billion upfront fee is substantially larger than the 2016 process (€770 million at the time) as well as greater than what we had been modelling (€1.3-1.5 billion).”
Gambling.com looked at favorably
Jeffries’ David Katz May 15 looked at Gambling.com.
“Gambling.com continues to prove that it is the exception to the weakness in affiliates more broadly, with strong recurring revenue in both the B2B and B2C segments,” Katz wrote. “Additionally, we view the company’s 90%+ gross margin and ~40% EBITDA margins as best in class, while the aspirational target of $100 million in EBITDA looks more achievable through organic and M&A growth. We view the pressured response in the shares as a buying opportunity. Reiterate Buy.”
DoubleDown Interactive below consensus
“Buy-rated DoubleDown Interactive (DDI, $22 price target) reported 1Q revenue of $83 million that was -5.3% year-over-year,” wrote B Riley’s Josh Nichols in a May 14 statement, “coming in below consensus of $85 million but above our $81 million. Social casino revenue that accounts for 84% of sales was -12.0% year-over-year against a challenging comp, while SuprNation iCasino revenue (16% of sales) was +59% year-over-year to a record $13.2 million and was well above our $9.4 million estimate. The company’s additional igaming investments in new player acquisition are experiencing good traction in both the UK and Sweden, and management sees many opportunities to further scale the business, including expanding to other European markets.”
AGS, Everi deals on track
Truist’s Barry Jonas May 15 noted first quarter earnings from AGS and Everi, “as their respective take-private deals remain on schedule to close shortly, with AGS still expected for 3Q25 and Everis now potentially even closing in 2Q. We increase our AGS ‘25E/’26E EBITDA by +3%/+1% and decrease our Everi ’25E/’26E EBITDA by -6%/-7% respectively. We maintain our price targets and see minimal risk to either deal close.”
