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Inspired Entertainment, Inc. (INSE)
NASDAQ:INSE
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Inspired Entertainment
(NASDAQ:INSE)
Rating:67Neutral
Price Target:
$8.50
▲(1.31%Upside)
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 (INSE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$225.79M
Dividend YieldN/A
Average Volume (3M)152.03K
Price to Earnings (P/E)3.3
Beta (1Y)1.26
Revenue Growth-7.53%
EPS Growth2035.55%
CountryUS
Employees1,420
SectorConsumer Cyclical
Sector Strength57
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.00
Shares Outstanding26,912,200
10 Day Avg. Volume248,693
30 Day Avg. Volume152,031
Financial Highlights & Ratios
PEG Ratio-0.12
Price to Book (P/B)-6.16
Price to Sales (P/S)0.00
P/FCF Ratio-71.08
Enterprise Value/Market Cap2.74
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit2.96
Enterprise Value/Ebitda2.22
Forecast
1Y Price Target
$12.50Price Target Upside48.99% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Inspired Entertainment Business Overview & Revenue Model
Company DescriptionInspired Entertainment, Inc. (INSE) is a leading company in the global gaming industry, specializing in the development and supply of virtual sports, mobile gaming, and server-based gaming systems. The company operates across a diverse range of sectors, including land-based and online gaming platforms. Its core products and services include virtual sports offerings, digital gaming content, and electronic gaming machines which are provided to various operators, from small businesses to large multinational corporations.
How the Company Makes MoneyInspired Entertainment generates revenue through several key streams. The company earns money by supplying its virtual sports and gaming content to both land-based and online operators, who pay licensing and service fees to access these products. Additionally, Inspired Entertainment sells and leases electronic gaming machines to retail gaming venues, deriving income from both direct sales and ongoing maintenance agreements. The company also benefits from revenue-sharing arrangements with its clients, where a portion of the gaming revenue generated through their products is shared with Inspired. Significant partnerships with major gaming operators and continued expansion into new markets further contribute to the company's financial performance.
Inspired Entertainment Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 12.32%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a mixed outlook, with strong growth in the Interactive and U.S. markets and successful refinancing efforts. However, challenges in Brazil, holiday timing issues, and a decline in Virtual Sports highlighted areas of concern. Overall, the positive growth in digital segments and refinancing outweigh the negatives.Q1-2025 Updates
Positive Updates
Strong Growth in Interactive Segment
The Interactive business showed significant growth with revenue increasing 49% and adjusted EBITDA increasing 79% over Q1 2024. Margins expanded from 54% to 64% in 2025.
Successful Debt Refinancing
The company successfully negotiated the refinancing of its existing bonds with a new 5-year sterling-denominated floating rate financing, providing greater flexibility and expected rate reductions.
Expansion in North America
The U.S. business grew by 90% against a market growth of about 20%, highlighting strong content and account management quality.
New Product Launches in Virtual Sports
Key initiatives in Virtual Sports, including licensed content launches in North America, a new Brazil-specific soccer game, and expansion in Greece and Turkey, are expected to drive growth.
Promising Hybrid Dealer Product
The Hybrid Dealer product, including branded wheel games and new derivatives, is scaling rapidly with major operators like BetMGM and Caesars.
Negative Updates
Regulatory Challenges in Brazil
The company faced disturbances due to new regulations and taxes in Brazil, impacting the Virtual Sports business.
Impact of U.K. Easter Holiday Shift
The Leisure business was negatively affected by the shift of the U.K. Easter holiday from Q1 to Q2, impacting performance.
Virtual Sports Segment Decline
Despite recovery efforts, the Virtual Sports segment experienced a year-over-year quarterly decline in EBITDA.
Macro Challenges in the U.K. Retail Sector
The U.K. retail market is experiencing challenges, with softness reported in customers other than William Hill.
Company Guidance
During the Inspired Entertainment First Quarter 2025 Conference Call, the company reported a strong performance with a first-quarter adjusted EBITDA of approximately $18.5 million, reflecting a growth of nearly 20% compared to the previous year. The Interactive segment showed remarkable growth, with revenue increasing by 49% and adjusted EBITDA rising by 79% over Q1 2024, while margins expanded from 54% to 64%. The U.S. market grew by 90% against a 20% underlying market growth, underscoring the effectiveness of their content and account management. Additionally, the company successfully renegotiated its debt, replacing existing bonds with a five-year sterling-denominated floating rate financing, which is expected to provide greater flexibility for future operations. The company also plans to sell its holiday park business to further deleverage and reduce annual CapEx to around $25 million. Despite challenges in the Leisure business and disturbances in Brazil due to new regulations, the company expressed confidence in the stabilization and future growth of its Virtual Sports segment.Inspired Entertainment Financial Statement Overview
Summary
Inspired Entertainment shows strong cash flow generation and improving profitability but faces challenges with revenue growth and a heavily leveraged balance sheet. The negative equity situation poses financial risks that need addressing.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.65
Positive
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.45
Neutral
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.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 294.40M | 297.10M | 323.00M | 285.40M | 208.90M | 199.80M |
| Gross Profit | 209.00M | 204.80M | 155.40M | 213.40M | 158.20M | 155.30M |
| EBITDA | 48.00M | 78.90M | 84.00M | 90.70M | 53.90M | 53.00M |
| Net Income | 70.40M | 64.80M | 7.60M | 20.60M | -36.70M | -29.20M |
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 | 288.50M | 322.50M | 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 | -88.70M |
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
Positive
8.39
Price Trends
7.82
Positive
8.49
Negative
8.97
Negative
Market Momentum
0.05
Negative
62.78
Neutral
88.31
Negative
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 8.39 is above the 20-day moving average (MA) of 7.86, above the 50-day MA of 7.82, and below the 200-day MA of 8.97, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 62.78 is Neutral, neither overbought nor oversold. The STOCH value of 88.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INSE.
Inspired Entertainment Risk Analysis
Inspired Entertainment disclosed 50 risk factors in its most recent earnings report. Inspired Entertainment 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
Inspired Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $425.81M | 12.31 | 25.73% | ― | 24.67% | 91.06% | |
68 Neutral | $518.40M | 10.86 | 49.64% | ― | 6.60% | 778.46% | |
67 Neutral | $225.79M | 3.34 | -12.77% | ― | -7.53% | 2035.55% | |
65 Neutral | $383.38M | ― | ― | ― | ― | ||
62 Neutral | $16.65B | 11.16 | -7.38% | 3.11% | 1.59% | -23.30% | |
49 Neutral | $141.74M | ― | -79.70% | ― | 13.92% | -54.82% |
* Consumer Cyclical Sector Average
Performance Comparison
INSE
Inspired Entertainment
8.39
-0.67
-7.40%
FLL
Full House Resorts
3.94
-1.11
-21.98%
AGS
Playags
12.49
1.14
10.04%
CDRO
Codere Online
8.40
0.34
4.22%
GAMB
Gambling.com
11.96
3.75
45.68%
Inspired Entertainment Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Inspired Entertainment Completes £270M Private Placement
Positive
Jun 9, 2025
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.
The most recent analyst rating on (INSE) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Inspired Entertainment stock, see the INSE Stock Forecast page.
Executive/Board ChangesShareholder Meetings
Inspired Entertainment Elects Directors at Annual Meeting
Neutral
May 27, 2025
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.
The most recent analyst rating on (INSE) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Inspired Entertainment stock, see the INSE Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.