Inspired Entertainment (INSE) AI Stock Analysis

• Market Cap: $253.05M
• Dividend Yield: N/A
• Average Volume (3M): 133.36K
• Price to Earnings (P/E): 4.3
• Beta (1Y): 1.32
• Revenue Growth: -4.95%
• EPS Growth: N/A
• Country: US
• Employees: 1,420
• Sector: Consumer Cyclical
• Sector Strength: 82
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): -0.27
• Shares Outstanding: 26,920,506
• 10 Day Avg. Volume: 135,047
• 30 Day Avg. Volume: 133,357
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.29
• Enterprise Value/Revenue: 1.97
• Enterprise Value/Gross Profit: 2.78
• Enterprise Value/Ebitda: 12.09
• 1Y Price Target: $16.00
• Price Target Upside: 70.21% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 69 Neutral
• Price Target: $9.50 ▲(1.06% Upside)

Inspired Entertainment's overall stock score reflects strong earnings call outcomes and positive corporate events, which are offset by financial risks due to high leverage. The stock's undervaluation and stable technical indicators further support its potential, despite challenges in revenue growth and the Virtual Sports segment.

Positive Factors

Earnings Beat

Inspired Entertainment reported 3Q24 EBITDA of $30M, beating consensus expectations by 3%.

Interactive Division Growth

Interactive division increased EBITDA by 47% and beat consensus by 13%.

Strategic Partnerships

The hybrid dealer product continued to make progress with a strategic partnership with FanDuel, one of the largest gaming operators in the United States.

Negative Factors

Gaming Segment Decline

Gaming 2Q revenues and EBITDA declined by 13% and 12% year-over-year.

Valuation Concerns

Shares of INSE are currently trading sub-5x EV/EBITDA, below peers, recent supplier M&A transactions, and its historic levels.

Virtual Sports Challenges

Virtual Sports continues to face headwinds resulting in EBITDA being 16% below consensus.

Inspired Entertainment Business Overview & Revenue Model

Company Description

Inspired Entertainment, Inc., a business-to-business gaming technology company, supplies content, platform, and other products and services to regulated lottery, betting, and gaming operators worldwide. The company operates through four segments: Gaming, Virtual Sports, Interactive, and Leisure. The Gaming segment supplies gaming terminals and software to betting offices, casinos, gaming halls, and high street adult gaming centers; a portfolio of games through its digital terminals under the Centurion and Super Hot Fruits names; and traditional casino games, such as roulette, blackjack, and number games. The Virtual Sports segment designs, develops, markets, and distributes ultra-high-definition sports games that include greyhounds, tennis, motor racing, cycling, cricket, speedway, golf, and dart, and other horse racing games under the V-Play Soccer, V-Play Football, V-Play Basketball, Virtual Grand National, and V-Play NFLA names. The Interactive segment provides a range of premium random number generated casino content from feature-rich bonus games to European-style casino free spins and table games. The Leisure segment supplies gaming terminals and amusement machines in pubs, bingo halls, and adult gaming centers, as well as family entertainment centers, bowling centers, and other entertainment venues. Inspired Entertainment, Inc. is headquartered in New York, New York.

How the Company Makes Money

Inspired Entertainment generates revenue through multiple key streams. Primarily, the company earns money by licensing its gaming content and technology to operators, including lottery organizations and online gaming platforms. This licensing model allows Inspired to receive ongoing royalties and fees based on the performance of its games. Additionally, the company sells its proprietary gaming machines and systems, which are installed in various venues, contributing to hardware sales revenue. Significant partnerships with major gaming operators and regulatory bodies help expand its market reach and enhance its product offerings, further driving revenue growth. Inspired also explores opportunities in emerging markets, leveraging its expertise in virtual sports to tap into new customer bases and increase its overall earnings.

Inspired Entertainment Financial Statement Overview

Summary

Inspired Entertainment's financials present a mixed picture. The income statement shows improving profitability but struggles with consistent revenue growth. The balance sheet is heavily leveraged, posing risks due to negative equity. However, cash flow metrics are strong, showcasing solid cash generation and improving free cash flow. The company should focus on stabilizing revenue and strengthening its balance sheet to enhance financial health.

Income Statement

Inspired Entertainment shows a mixed performance in its income statement. The gross profit margin for TTM is strong, indicating efficient cost management, but revenue growth has been inconsistent, with recent declines. The net profit margin has improved due to higher net income, enhancing profitability. However, the EBIT margin has decreased, suggesting potential operational challenges. Overall, profitability is improving, but growth remains a concern.

Balance Sheet

The balance sheet reveals significant leverage with a high debt-to-equity ratio, as the company has negative equity. This poses financial risk. Return on Equity is not meaningful due to negative equity. The equity ratio is also negative, indicating that liabilities exceed assets. The company needs to address its capital structure to improve financial stability.

Cash Flow

Cash flow analysis highlights strong operating cash flow relative to net income, indicating good cash generation from operations. The free cash flow has grown significantly in the TTM period despite past volatility, reflecting improved capital expenditure management. This is a positive sign for liquidity and financial flexibility, although sustained performance is crucial.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	294.40M	297.10M	323.00M	285.40M	205.80M	198.30M
Gross Profit	209.00M	204.80M	155.40M	213.40M	136.20M	137.40M
EBITDA	48.00M	82.30M	82.70M	90.70M	53.90M	50.70M
Net Income	70.40M	64.80M	7.60M	20.60M	-40.60M	-32.40M
Balance Sheet
Total Assets	458.90M	438.40M	340.90M	309.40M	331.70M	324.10M
Cash, Cash Equivalents and Short-Term Investments	39.00M	29.30M	40.00M	25.00M	47.80M	47.10M
Total Debt	360.50M	350.80M	331.50M	296.00M	332.20M	311.10M
Total Liabilities	461.10M	441.70M	418.90M	367.10M	409.70M	412.80M
Stockholders Equity	-2.20M	-3.30M	-78.00M	-57.70M	-78.00M	-101.70M
Cash Flow
Free Cash Flow	32.50M	2.90M	-2.30M	-5.00M	-19.20M	23.00M
Operating Cash Flow	53.60M	31.70M	45.50M	34.80M	6.20M	52.90M
Investing Cash Flow	-47.50M	-40.10M	-48.40M	-40.40M	-37.90M	-29.90M
Financing Cash Flow	-3.10M	-1.60M	16.20M	-11.10M	31.20M	-8.20M

Inspired Entertainment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INSE, the sentiment is Positive. The current price of 9.4 is above the 20-day moving average (MA) of 8.78, above the 50-day MA of 8.84, and above the 200-day MA of 8.83, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 60.91 is Neutral, neither overbought nor oversold. The STOCH value of 56.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INSE.

Inspired Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INSE	69 Neutral	$253.05M	4.32	-12.77%	―	-4.95%	―
AGS	68 Neutral		―		―	6.60%	778.46%
GAMB	66 Neutral	$294.08M	20.28	10.86%	―	27.57%	-40.98%
Sector *	61 Neutral	$17.92B	12.81	-3.11%	2.97%	1.30%	-14.28%
CDRO	55 Neutral	$376.08M	601.46	2.77%	―	―	―
GAN	51 Neutral		―		―	7.02%	74.19%
FLL	47 Neutral	$122.78M	―	-101.45%	―	8.24%	-43.10%

Inspired Entertainment Corporate Events

Inspired Entertainment Sells UK Holiday Parks Business

On August 27, 2025, Inspired Entertainment announced a definitive agreement to sell its UK holiday parks business and certain leisure assets to GENDA Inc. for approximately £18.6 million in cash. This transaction, expected to close in the fourth quarter of 2025, is part of Inspired’s strategy to shift towards a more digital and scalable model, enhancing its long-term growth potential and improving its EBITDA margin. The sale will streamline operations and allow Inspired to focus on higher-margin digital services, with net proceeds primarily used to pay down debt.

Inspired Entertainment Completes £270M Private Placement

On June 9, 2025, Inspired Entertainment completed a private placement of £270 million in senior secured notes due 2030 and established a new £17.8 million revolving credit facility. The proceeds will be used to refinance existing notes and credit facilities, cover related fees, and support general corporate purposes. This financial maneuver aims to strengthen Inspired’s financial position by replacing existing debt with more favorable terms, potentially enhancing its operational flexibility and market competitiveness.

Inspired Entertainment Elects Directors at Annual Meeting

On May 27, 2025, Inspired Entertainment, Inc. held its 2025 Annual Meeting of Stockholders, where seven directors were elected to serve until the 2026 Annual Meeting. Additionally, the appointment of CBIZ CPAs P.C. as the independent auditor for the fiscal year ending December 31, 2025, was ratified.