GAN - GAN Limited Stock Dropped Today. Has Its Growth Profile Changed?
GAN Limited (NASDAQ: GAN) reported a $0.20-per-share loss in the fourth quarter of 2021, and analysts had been expecting a loss of just $0.13 per share. It also missed on the top line, with revenues of roughly $30.5 million, more than 12% below the consensus estimate. Investors really don't like it when a company misses on both the top and bottom lines, so it is hardly shocking that Wall Street was bearish on the stock today. It fell as much as 22% in early trading. But quarterly revenues and earnings weren't the only numbers worth looking at.
For the full year of 2021, GAN Limited's loss came in at $0.59 per share, an improvement from the full-year loss of $0.75 per share in 2020. And on the top line, revenues increased to $125 million from just $35 million in the prior year. This is a small company with a modest $200 million or so market cap , and it's focused on expanding its reach in the online gambling space. That it is losing money while at the same time dramatically expanding its revenues isn't even remotely shocking.
Which is why it's important to dig into the numbers a little bit. For example, a notable part of the earnings miss was related to weakness in the company's direct-to-consumer operations. That's likely a sign of the inherent volatility of this business, which actually increased the number of active customers it serves between the third and fourth quarters. The year-over-year period isn't really comparable with regard to active customers because of an acquisition on this side of the business.
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GAN Limited Stock Dropped Today. Has Its Growth Profile Changed?