Doubledown Interactive Co (DDI) AI Stock Analysis

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Doubledown Interactive Co

(NASDAQ:DDI)

Rating:75Outperform

Price Target:―

Overall, Doubledown Interactive Co scores well with robust financial performance and strong earnings growth, driven by effective cash flow management and strategic acquisitions like SuperNation. However, technical analysis presents mixed signals, and challenges in the declining social casino market could impact future growth. The low P/E ratio offers a valuation advantage despite the lack of a dividend yield.

Positive Factors

Direct-to-Consumer Strategy

DoubleDown is positioned well to capitalize off this development having already built out its direct-to-consumer platform.

Geographical Expansion

DoubleDown has a well-established and ever-expanding European presence and expertise in social casino games, positioning it well for potential growth in the U.S. RMG market.

User Monetization

The company’s ability to monetize its base, converting nearly 7% of its active users into active payers, is impressive, tracking at over 3x the industry average.

Negative Factors

Market Valuation

DDI shares trade at what is viewed as an excessively pessimistic <1x 2025E EV/EBITDA compared with social casino gaming peers at 5x.

User Base Decline

DoubleDown is executing well against a temporarily declining user base, with plenty of competition in the social casino space, as it grows its real-money gaming business, and as it looks to expand into other casual games.

User Metrics

Management optimized gross margin and marketing expenditures to balance against declining user metrics, achieving profitability expectations.

Doubledown Interactive Co (DDI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$519.82M

Dividend YieldN/A

Average Volume (3M)28.19K

Price to Earnings (P/E)4.4

Beta (1Y)0.50

Revenue Growth10.71%

EPS Growth21.74%

CountryUS

Employees190

SectorCommunication Services

Sector Strength88

IndustryElectronic Gaming & Multimedia

Share Statistics

EPS (TTM)9.62

Shares Outstanding49,553,440

10 Day Avg. Volume11,930

30 Day Avg. Volume28,194

Financial Highlights & Ratios

PEG Ratio8.60

Price to Book (P/B)11.57

Price to Sales (P/S)0.00

P/FCF Ratio66.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$20.33

Price Target Upside93.80% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Doubledown Interactive Co Business Overview & Revenue Model

Company DescriptionDoubledown Interactive Co (DDI) is a leading developer and publisher of digital games, primarily focusing on the social casino gaming sector. The company is known for its flagship product, DoubleDown Casino, which provides players with a virtual casino experience featuring a variety of slot machines, poker, and other classic casino games. DDI operates primarily in the mobile gaming and social media platforms, offering users engaging and interactive gaming experiences.

How the Company Makes MoneyDoubledown Interactive Co generates revenue primarily through the sale of virtual currency within its games. Players purchase these in-game currencies to enhance their gaming experience, allowing them to play longer or access special features. The company's freemium model attracts a wide user base who can play for free but are incentivized to make in-app purchases for additional benefits. Key revenue streams include microtransactions, in-game advertisements, and partnerships with social media and mobile platforms to reach a broader audience. Additionally, the company may benefit from collaborations with other gaming developers and platforms to expand its market presence and introduce new games.

Doubledown Interactive Co Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: 2.84%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed sentiment with significant growth in iGaming revenues and cash flow improvements being overshadowed by challenges in Social Casino revenue declines and increased user acquisition costs. Despite strong monetization metrics, the company faces competitive pressures and difficulties in launching new games.

Q1-2025 Updates

Positive Updates

Strong iGaming Revenue Growth

SuperNation iGaming revenues increased by 59% year-over-year, reaching $13.2 million, the highest quarterly performance since acquisition.

Increased Cash Flow from Operations

Cash flow from operations in Q1 2025 was $41.1 million, up more than $5 million from Q1 2024.

Improved Monetization Metrics

ARPDAU increased to $1.29 from $1.26, and payer conversion rate increased to 6.9% from 6.4% year-over-year.

Strong Cash Position

DoubleDown maintains a net cash position of approximately $422 million as of March 31, 2025.

Negative Updates

Decline in Social Casino Revenue

Social Casino revenues declined by 12% year-over-year, impacted by strong performance in the prior year.

Challenges with New Game Launch

Decision not to move forward with the commercial launch of a new match-three game after extensive testing.

Increased User Acquisition Costs

User acquisition costs have risen, attributed to large investments by sweepstakes games publishers.

Company Guidance

During DoubleDown Interactive's first quarter earnings call for fiscal year 2025, management provided key financial metrics and guidance. The company reported consolidated revenue of $83.5 million and an adjusted EBITDA of $30.8 million. The Social Casino segment contributed $70.3 million, while the iGaming business, SuperNation, generated $13.2 million, marking the highest quarterly revenue for SuperNation since its acquisition in late 2023. Despite a year-over-year revenue decline in the Social Casino segment by 12%, the company achieved strong performance in monetization KPIs, with an increase in ARPDAU to $1.29 and payer conversion rate rising to 6.9%. Cash flow from operations rose to $41.1 million, up from $35.7 million in Q1 2024. The company highlighted a focus on maintaining strong cash flow conversion and profitability, with an emphasis on expanding direct-to-consumer revenue in the Social Casino business to exceed 15% in 2025. Additionally, DoubleDown expressed confidence in further scaling SuperNation within existing markets and exploring expansion into other regulated European iGaming markets, while also actively seeking potential acquisitions to diversify revenue sources.

Doubledown Interactive Co Financial Statement Overview

Summary

Doubledown Interactive Co demonstrates strong financial performance across all verticals. The company has successfully increased profitability and maintains a solid balance sheet with low leverage. Cash flow management is a notable strength, ensuring financial resilience and flexibility. While past revenue fluctuations pose a potential risk, the overall financial health is commendable.

Income Statement

Very Positive

Doubledown Interactive Co shows strong profitability with a consistent increase in net income and EBIT margins over recent years. The 2024 figures highlight a gross profit margin of 69.7% and a net profit margin of 36.3%, both indicating robust profitability. The revenue growth rate from 2023 to 2024 was 10.5%, showcasing a healthy upward trend. However, past fluctuations in revenue and profit margins indicate some degree of volatility.

Balance Sheet

Positive

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.05 in 2024, reflecting conservative leverage. The equity ratio stands strong at 92.9%, indicating a high level of financial stability. However, the company has shown a decrease in total assets over time, which could signal potential risks if this trend continues.

Cash Flow

Very Positive

The cash flow statement reveals impressive improvements, with a remarkable free cash flow growth rate of 416.9% from 2023 to 2024. The operating cash flow to net income ratio of 1.20 suggests efficient cash generation from operations. Free cash flow consistently exceeds net income, highlighting strong cash flow management. These factors contribute to a robust cash position, enhancing financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
341.33M	308.86M	321.03M	363.20M	358.34M
	Gross Profit
237.79M	282.93M	211.72M	236.59M	232.09M
	EBIT
137.01M	124.34M	102.64M	98.73M	88.78M
	EBITDA
141.87M	136.72M	-263.64M	120.54M	117.58M
	Net Income Common Stockholders
124.02M	100.89M	-233.98M	78.11M	53.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
414.85M	274.99M	285.24M	242.06M	63.19M
	Total Assets
906.16M	803.34M	792.05M	969.92M	806.83M
	Total Debt
38.69M	46.35M	44.13M	49.94M	56.82M
	Net Debt
-296.16M	-160.56M	-173.22M	-192.12M	-6.37M
	Total Liabilities
64.13M	75.45M	165.83M	105.93M	107.32M
	Stockholders Equity
841.91M	727.73M	626.23M	863.99M	699.51M
Cash Flow		Free Cash Flow
147.59M	28.53M	50.52M	94.30M	99.63M
	Operating Cash Flow
148.45M	28.71M	50.79M	96.11M	99.85M
	Investing Cash Flow
-15.61M	-30.27M	-67.83M	-1.81M	-2.17M
	Financing Cash Flow
-2.01M	0.00	-2.91M	86.04M	-76.27M

Doubledown Interactive Co Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.49

Price Trends

50DMA

9.95

Positive

100DMA

10.01

Positive

200DMA

11.79

Negative

Market Momentum

MACD

0.12

Negative

RSI

59.89

Neutral

STOCH

60.44

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDI, the sentiment is Positive. The current price of 10.49 is above the 20-day moving average (MA) of 10.13, above the 50-day MA of 9.95, and below the 200-day MA of 11.79, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 59.89 is Neutral, neither overbought nor oversold. The STOCH value of 60.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DDI.

Doubledown Interactive Co Risk Analysis

Doubledown Interactive Co disclosed 54 risk factors in its most recent earnings report. Doubledown Interactive Co reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 2 New Risks

There can be no assurance that the adoption of the International Financial Reporting Standards, or IFRS, will not adversely affect our reported results of operations or financial condition. Q4, 2023

Failure to comply with regulatory requirements in a particular jurisdiction, or the failure to successfully obtain a license or permit applied for in a particular jurisdiction, could impact SuprNation's ability to comply with licensing and regulatory requirements in other jurisdictions, or could cause the rejection of license applications or cancellation of existing licenses in other jurisdictions, or could cause financial institutions, online and mobile platforms, advertisers and distributors to stop providing services to Supernation which it relies upon to receive payments from, or distribute amounts to, its users, or otherwise to deliver and promote our product offerings and services. Q4, 2023

Doubledown Interactive Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRVY	78 Outperform	$438.13M	7.63	14.97%	―	-33.83%	-38.30%
FVRR	76 Outperform	$1.21B	68.08	4.85%	―	10.41%	122.27%
DDI	75 Outperform	$519.82M	4.42	13.91%	―	10.71%	21.74%
MYPS	62 Neutral	$183.87M	―	-11.64%	―	-11.11%	-90.96%
Sector *	61 Neutral	$14.60B	5.95	-4.32%	3.69%	2.76%	-30.49%
THRY	55 Neutral	$594.84M	―	-51.21%	―	-14.71%	66.24%
SEAT	51 Neutral	$354.44M	25.25	-1.00%	―	0.82%	-102.72%

* Communication Services Sector Average

Performance Comparison

DDI

Doubledown Interactive Co

10.52

-2.27

-17.75%

GRVY

Gravity Co

65.27

-20.46

-23.87%

FVRR

Fiverr International

32.18

7.54

30.60%

THRY

Thryv Holdings

13.74

-6.13

-30.85%

SEAT

Vivid Seats

1.81

-3.47

-65.72%

MYPS

PLAYSTUDIOS

1.50

-0.71

-32.13%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.