Friday, an analyst from Craig-Hallum increased the price target on shares of Gambling.com Group Ltd. (NASDAQ: GAMB) to $18 from the previous target of $16 while maintaining a Buy rating. The adjustment follows Gambling.com's acquisition of Odds Holdings, which includes consumer platform OddsJam and business-to-business platform OpticOdds. According to InvestingPro data, the stock is currently trading at $15.63, with two analysts recently revising their earnings estimates upward for the upcoming period.
The analyst praised the acquisition, noting Gambling.com's selective but effective merger and acquisition strategy. The deal was described as strategically sound, accretive, and likely to yield significant synergies. The acquired technology and assets were highlighted as uniquely positioned, with the potential to enhance Gambling.com's offerings.
The company's financial performance was also a factor in the positive outlook. Gambling.com has been growing its revenue at a rate of 27.63% and boasts impressive gross profit margins of 91.61%, with an EBITDA margin close to 50% anticipated for 2024. The revenue model, based on recurring subscription services, is expected to contribute to the company's financial stability. InvestingPro subscribers have access to over 12 additional key financial metrics and insights about GAMB's performance.
Furthermore, the commitment of the Odds Holdings founders and team to the success of the merger is underscored by the deal's structure. Half of the purchase price is contingent on the acquired company's EBITDA doubling from an estimated $12 million in 2024 to over $24 million by 2026, indicating confidence in the future performance post-acquisition.
The stock has demonstrated strong momentum, with a year-to-date return of 60.31% and is currently trading near its 52-week high of $16.09. For comprehensive analysis and valuation insights, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, Gambling.com Group has reported record Q3 revenue of $32.1 million, marking a 37% increase from the same period last year. The company also saw a significant rise in its adjusted EBITDA, which reached $12.6 million, a 108% increase year-over-year. These strong results led Truist Securities to revise the company's stock price target from $13.00 to $16.00, maintaining a Buy rating on the company's shares.
Furthermore, Gambling.com Group has disclosed its plan to acquire Odds Holdings, the parent company of OddsJam, for an initial payment of $80 million. This strategic move is set to expand Gambling.com Group's online gambling industry footprint, adding new recurring revenue streams from both consumer and enterprise clients.
Stifel has also increased the price target for Gambling.com Group shares to $17, up from the previous target of $14, while reaffirming a Buy rating on the stock. The adjustment comes in response to Gambling.com's recent acquisition announcement.
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