GAMB - Gambling.com lands bull rating from Roth MKM as analyst love continues

2023-07-11 08:09:50 ET

Roth MKM started off coverage on Gambling.com Group Limited ( NASDAQ: GAMB ) on Tuesday with a Buy rating as the gaming stock continues to attract more positive attention from investment firms. Underpinning Roth MKM's bullish initiation, Gambling.com's ( GAMB ) revenue growth is said to be outpacing the global iGaming market, and the affiliate company is noted to be gaining U.S. wallet share.

Analyst Edward Engel noted Gambling.com ( GAMB ) directly benefits from the industry's elevated marketing spend and is forecast to increase wallet share as B2C operators target greater marketing efficiency over time. In terms of valuation, Roth MKM does not think GAMB's 8% free cash flow yield reflects its leading U.S. exposure vs. peers or the sustainability of its growth in both new and mature markets.

"GAMB has a clean capital structure with no debt and a low count of dilutive shares. The company also has an efficient operating model with 35%+ EBITDA margins which should expand further as revenue growth exceeds OpEx growth. After elevated investments from 2021-22, CapEx is normalizing lower, and 2023 FCF conversion should rebase to 70% vs. 35% in 2022."

As a kicker, Gambling.com ( GAMB ) is considered a M&A target by Engel and team. Roth MKM assigned a price target of $13 to GAMB to reflect a 7.6X multiple off the 2024 EBITDA estimate and an 8% free cash flow yield, which are noted to be discounts to peers.

Gambling.com ( GAMB ) has a clean sweep of all bull ratings on Wall Street, while the Seeking Alpha Quant Rating is flashing Hold.

Shares of Gambling.com ( GAMB ) rose 1.05% in premarket trading to $10.74 vs. the 52-week trading range of $6.62 to $11.49.

More on Gambling.com:

• Gambling.com Group: Still A Lot Of Upside Left
• Growth metrics on Gambling.com
• Valuation metrics on Gambling.com
• Recent option trades on Gambling.com

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