Bragg's Continued Push Into US & European iGaming Markets Will Diversify Revenue And Drive Growth, Analyst Says

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  • Benchmark analyst Mike Hickey reiterates Bragg Gaming Group Inc BRAG with a Speculative Buy and an $8 price target.
  • BRAG delivered Q4 financial results that exceeded the consensus view on profitability and updated FY23 guidance.
  • The quarterly performance was led mainly by new PAM & turnkey launches in the Dutch and Czech markets, along with better-than-expected exclusive and proprietary content performance. 
  • BRAG has guided for positive FY23 operating cash flow and will self-fund new investment opportunities, including their U.S. expansion. 
  • Year-end cash was €11 million, and debt was €9 million. 
  • BRAG emphasized that they do not believe in the need for another capital raise in the near future. 
  • Continued entry into the U.S. & European iGaming markets will continue to diversify revenue and be the critical driver of growth. 
  • Better-than-expected content performance was incremental in this quarter’s beat, and as the iGaming market continues to grow in the states & abroad, capitalizing on new markets will improve margins and boost profitability. 
  • BRAG already operates in several vital iGaming states, including New Jersey, Michigan, and Connecticut, with a planned launch in Pennsylvania, the second-largest iGaming market in the U.S., pending approval.
  • The price target multiple is in-line with peers, which Hickey thinks is appropriate considering his view of BRAG’s elevated revenue growth opportunity and emerging profit margin.
  • Price Action: BRAG shares traded higher by 0.67% at $3.7650 on the last check Wednesday.
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