Craig-Hallum downgrades Playstudios to Hold given industry challenges

As previously reported, Craig-Hallum downgraded Playstudios to Hold from Buy with a price target of $2, down from $4. The combined rise in real-money iGaming and rapid increase of the Sweepstakes gaming category has resulted in accelerated industry headwinds for the social casino industry, including Playstudios’ top game POP! Slots, the firm notes. Management meaningfully reduced its 2024 revenue guidance, which previously implied mid-single-digit revenue growth in the second half of the year and now implies a high-single-digit decline. While the company has a strong balance sheet, unappreciated B2B opportunities with playAWARDS, and is making the right moves from a capital allocation standpoint, Craig-Hallum says it can’t ignore the increasingly difficult industry environment.