Gambling.com (GAMB) AI Stock Analysis

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Gambling.com

(NASDAQ:GAMB)

78Outperform

Gambling.com scores a 78, reflecting strong financial performance and positive earnings guidance. The company demonstrates impressive revenue growth and profitability, supported by strategic acquisitions. Technical indicators show mixed signals, and valuation appears reasonable, though the absence of a dividend yield shifts focus to growth potential. Despite some challenges, the overall outlook is positive, driven by growth initiatives and market expansion.

Positive Factors

Earnings

GAMB's Q4 results exceeded expectations, with revenue and AEBITDA both coming in ahead of consensus.

Strategic Acquisitions

GAMB completed the acquisition of Odds Holdings, which is expected to be immediately accretive to GAMB's results.

Negative Factors

Investor Concerns

The suspicion from investors that GAMB may be considering a secondary offering could be contributing to recent share weakness.

Market Competition

OddsJam is relatively expensive, with several low-cost competitors attempting to disrupt.

Gambling.com (GAMB) vs. S&P 500 (SPY)

Market Cap

$402.90M

Dividend YieldN/A

Average Volume (3M)434.28K

Price to Earnings (P/E)13.5

Beta (1Y)0.66

Revenue Growth17.05%

EPS Growth73.00%

CountryUS

Employees555

SectorConsumer Cyclical

Sector Strength60

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.85

Shares Outstanding34,762,897

10 Day Avg. Volume394,054

30 Day Avg. Volume434,283

Financial Highlights & Ratios

PEG Ratio0.19

Price to Book (P/B)N/A

Price to Sales (P/S)4.52

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$19.00

Price Target Upside63.93% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Gambling.com Business Overview & Revenue Model

Company DescriptionGambling.com Group Limited operates as a performance marketing company for the online gambling industry worldwide. The company provides digital marketing services for the iGaming and sports betting. It publishes various branded websites, including Gambling.com and Bookies.com. Gambling.com Group Limited was incorporated in 2006 and is based in St. Helier, Jersey.

How the Company Makes MoneyGambling.com makes money primarily through performance-based affiliate marketing agreements with online gambling operators. The company earns revenue by driving traffic and delivering potential customers to these operators' websites. Key revenue streams include cost-per-acquisition (CPA) agreements, where the company is paid a fee for each new customer referred, and revenue share agreements, where Gambling.com receives a percentage of the revenue generated from customers referred to the operators. Significant partnerships with prominent online gambling operators and a robust portfolio of high-ranking websites are critical factors that contribute to its earnings.

Gambling.com Financial Statement Overview

Summary

Gambling.com exhibits strong financial performance with significant revenue and profit growth, robust margins, and a solid equity position. Revenue growth is impressive, and the company maintains high profit margins. The balance sheet is stable with manageable leverage, though the increased debt-to-equity ratio warrants monitoring. Cash flow is strong, but attention to free cash flow management is advised to enhance liquidity.

Income Statement

Very Positive

Gambling.com has demonstrated strong revenue growth with a substantial increase from $76.5M in 2022 to $127.2M in 2024, marking an impressive revenue growth trajectory. The gross profit margin remains high, consistently above 90% over the past years. Additionally, the net profit margin rose significantly from 23.8% in 2023 to 24.1% in 2024, indicating effective cost management and profitability improvement. Both EBIT and EBITDA margins are robust, with the EBIT margin improving from 20% in 2023 to 28% in 2024, showcasing operational efficiency. These factors combine to form a solid income statement performance.

Balance Sheet

Positive

The balance sheet shows a healthy equity position with a rising stockholders' equity from $87.1M in 2022 to $123.2M in 2024. The debt-to-equity ratio has increased to 0.23 in 2024, up from 0.01 in 2023, which requires monitoring but remains manageable. The equity ratio is strong at 69%, indicating a stable financial structure. Return on equity improved from 15.4% in 2023 to 24.9% in 2024, reflecting effective utilization of equity in generating profits. Overall, the balance sheet reflects a solid financial footing with moderate leverage.

Cash Flow

Positive

Operating cash flow has grown significantly, nearly doubling from $18.8M in 2022 to $37.6M in 2024, which supports the company's liquidity. However, free cash flow has decreased from $8.9M in 2023 to $3.8M in 2024, due to increased capital expenditures. The operating cash flow to net income ratio remains strong above 1, showing good cash generation relative to net income. The free cash flow to net income ratio has dropped, indicating lower conversion of net income into free cash flow. While cash flow generation is strong, careful management of capital expenditures is advised to enhance free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
127.18M	108.65M	76.51M	42.32M	27.98M
	Gross Profit
119.65M	99.54M	73.55M	42.32M	27.98M
	EBIT
35.67M	21.78M	15.85M	11.39M	11.13M
	EBITDA
42.75M	22.47M	10.61M	15.33M	15.08M
	Net Income Common Stockholders
30.68M	18.26M	2.39M	12.45M	15.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.73M	25.43M	29.66M	51.05M	8.22M
	Total Assets
178.58M	154.87M	138.88M	91.03M	45.38M
	Total Debt
27.96M	1.72M	2.07M	7.62M	7.93M
	Net Debt
14.23M	-23.71M	-27.59M	-43.42M	-290.00K
	Total Liabilities
55.40M	35.95M	51.77M	11.12M	11.17M
	Stockholders Equity
123.19M	118.92M	87.11M	79.91M	34.21M
Cash Flow		Free Cash Flow
3.81M	8.93M	9.47M	8.42M	10.80M
	Operating Cash Flow
37.64M	17.91M	18.75M	14.00M	10.89M
	Investing Cash Flow
-43.84M	-19.47M	-32.70M	-5.57M	-90.00K
	Financing Cash Flow
-5.24M	-3.14M	-7.31M	34.99M	-10.20M

Gambling.com Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.59

Price Trends

50DMA

13.88

Negative

100DMA

13.74

Negative

200DMA

11.60

Negative

Market Momentum

MACD

-0.27

Negative

RSI

43.35

Neutral

STOCH

30.53

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GAMB, the sentiment is Negative. The current price of 11.59 is below the 20-day moving average (MA) of 12.62, below the 50-day MA of 13.88, and below the 200-day MA of 11.60, indicating a bearish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 43.35 is Neutral, neither overbought nor oversold. The STOCH value of 30.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GAMB.

Gambling.com Risk Analysis

Gambling.com disclosed 54 risk factors in its most recent earnings report. Gambling.com 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 0 New Risks

Gambling.com Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GAMB	78 Outperform	$402.90M	13.54	25.34%	―	17.05%	73.00%
RSI	66 Neutral	$2.33B	526.50	3.61%	―	33.70%	―
MGM	66 Neutral	$7.60B	11.23	21.76%	―	6.66%	-24.59%
DKNG	60 Neutral	$28.28B	―	-54.81%	―	30.07%	39.93%
Sector *	59 Neutral	$11.18B	10.04	-1.58%	3.96%	1.31%	-16.97%
PENN	44 Neutral	$2.19B	―	-10.27%	―	3.38%	38.18%
GAN	38 Underperform	$78.31M	―	229.13%	―	4.31%	77.31%

* Consumer Cyclical Sector Average

Performance Comparison

GAMB

Gambling.com

11.55

2.39

26.09%

MGM

MGM Resorts

26.30

-20.11

-43.33%

PENN

Penn National Gaming

14.06

-3.99

-22.11%

DKNG

DraftKings

32.88

-12.66

-27.80%

GAN

1.74

0.37

27.01%

RSI

Rush Street Interactive

10.53

3.34

46.45%

Gambling.com Earnings Call Summary

Earnings Call Date: Mar 20, 2025 | % Change Since: -7.13% | Next Earnings Date: May 15, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong financial performance and optimistic growth prospects for Gambling.com Group, driven by strategic acquisitions and market expansion. Despite some challenges in North American sports revenue and traffic from media partnerships, the company's robust core business and strategic initiatives indicate a positive outlook.

Highlights

Record Quarterly and Full-Year Financial Performance

Gambling.com Group achieved record revenue of $35.3 million and adjusted EBITDA of $14.7 million in Q4 2024. Full-year 2024 revenue and adjusted EBITDA rose 17% and 33% respectively.

Strategic Acquisitions and Growth Prospects

The acquisition of OddsJam and OpticOdds expanded the company's product portfolio, promising a 20% growth in incremental adjusted EBITDA from these businesses.

Strong Organic and Market Share Growth

The company expects to grow revenue by 35% and adjusted EBITDA by 40% in 2025, with significant contributions from expanded product offerings and market share gains.

Increased Revenue from Subscriptions

Recurring subscription revenue is expected to account for over 20% of total group revenue in 2025, driven by the OddsJam and OpticOdds acquisitions.

Robust Performance in Core Affiliate Business

The company reported its best quarter in its 19-year history for the core affiliate business, with strong growth in iGaming revenue across operating regions.

Lowlights

Decline in North American Sports Revenue

There was a 9% decline in North American revenue due to less state launch activity and lower media partnership revenue.

Challenges in Traffic from Media Partnerships

The company anticipates substantially lower traffic from media partnerships, resulting in a headwind to overall revenue growth.

Impact of Regulatory Changes in Brazil

Gambling.com Group faced challenges due to regulatory changes in Brazil, which have affected affiliate businesses operating in the region.

Company Guidance

In the Gambling.com Group's fourth quarter 2024 earnings call, the company provided optimistic guidance for 2025, projecting a 35% growth in full-year revenue and a 40% increase in adjusted EBITDA, based on the midpoints of their initial guidance. This growth is anticipated to be driven by several key factors, including the recent acquisition of OddsJam and OpticOdds, which is expected to contribute approximately $14.5 million in incremental adjusted EBITDA. The company's core affiliate business also showed strength, with record revenue of $35.3 million in Q4 2024, and the full-year revenue and adjusted EBITDA rising by 17% and 33%, respectively. Furthermore, Gambling.com anticipates over 20% of its 2025 revenue to derive from subscriptions, enhancing its diversified market exposure and ability to drive high-intent traffic. The company is also optimistic about organic growth in sports betting, particularly in North America, and expects to capitalize on its expanded product portfolio and new opportunities in recently regulated markets such as Missouri.

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.