Gaming Innovation Group
Gaming Innovation Group - Momentum continues (ABG Sundal Collier)
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Q1e: 19% org. growth and 43% adj. EBITDA marginWe forecast Q1 normalised sales and adj. EBITDA of EUR 28m and 12.2m, respectively, corresponding to sales growth of 48% y-o-y (19% organically) and a normalised adj. EBITDA margin of 43%. Sequentially, we estimate platform sales to be flattish following weaker seasonality after a strong Q4 including the WC, partly offset by underlying growth on the continued addition of new signings. In Media, we expect 13% q-o-q growth, mainly on the addition of AskGamblers from Feb'23 and onwards. On opex, we expect limited opex changes sequentially following the savings programme, offset by a small increase in normalised marketing due to higher media revenue. We trim our margin assumptions slightly on raised other opexSince the Q4 report, GiG has expanded its media partnership with News UK, and has signed its first agreement for the new Enterprise Solution with a "...successful industry group". As well, "the average estimated yearly contract value is materially above current averages for GiG's SaaS contracts". As the company is consistently announcing signings and expansions, we have no reason to expect a significant slowdown in organic growth during the upcoming quarters; we arrive at 19% org. growth for FY'23e, in line with its target of ~20%. However, we raise opex slightly, weighing 1pp on the '23e-'25e margin. Share is lagging peers YTD, well behind the BETZ ETFWhile the share was exceptionally strong in '22, '23e has started slower despite the strong sector performance. For instance, comparing with the BETZ iGaming and sports betting ETF, the GiG share is lagging significantly. The share is currently trading at 6.5x '23e EV/EBITDA on our updated estimates, corresponding to 7% below its historical average on cons. NTM EV/EBITDA, and 7% below the peer group median. |
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