Playtech (PYTCY) AI Stock Analysis

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Playtech

(OTC:PYTCY)

Rating:74Outperform

Price Target:―

Playtech's overall stock score reflects its strong financial performance, with efficient cost management leading to improved profit margins and a robust cash flow position. The technical analysis shows strong upward momentum, although the stock's valuation is slightly high. The earnings call provided a positive outlook with strategic growth initiatives. Despite some challenges, Playtech is well-positioned for future opportunities.

Playtech (PYTCY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.34B

Dividend YieldN/A

Average Volume (3M)0.00

Price to Earnings (P/E)26.9

Beta (1Y)1.11

Revenue Growth8.42%

EPS GrowthN/A

CountryUS

Employees8,300

SectorConsumer Cyclical

Sector Strength58

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.80

Shares Outstanding154,647,130

10 Day Avg. Volume0

30 Day Avg. Volume0

Financial Highlights & Ratios

PEG Ratio-0.11

Price to Book (P/B)0.51

Price to Sales (P/S)0.00

P/FCF Ratio3.07

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Playtech Business Overview & Revenue Model

Company DescriptionPlaytech (PYTCY) is a leading technology company in the gambling industry, providing a comprehensive range of software solutions, products, and services to online and brick-and-mortar gambling operators. The company operates across various sectors, including casino, live casino, sports betting, virtual sports, bingo, and poker. Playtech is known for its cutting-edge technology and innovative gaming solutions, offering a wide array of products that enhance user experience and optimize operator efficiency.

How the Company Makes MoneyPlaytech makes money primarily through its software licensing model, where it licenses its gaming and betting platforms to operators worldwide. The company earns revenue through a combination of fixed fees and a share of the operators' gaming revenues. Key revenue streams include licensing fees for its casino and sports betting platforms, and transaction-based fees from its financial trading division. Playtech also benefits from its significant partnerships with major gambling operators and strategic acquisitions, which expand its market reach and product offerings. Additionally, the company's live casino and virtual sports products contribute to its diverse revenue streams by attracting a broad range of customers.

Playtech Earnings Call Summary

Earnings Call Date:Mar 27, 2025

(Q4-2024)

% Change Since: 13.23%|

Next Earnings Date:Sep 18, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong financial performance with significant growth and strategic transformations. However, challenges remain with underperforming assets, expected margin pressures, and market transitions in Asia and Brazil. Despite these issues, the overall outlook is positive with strategic initiatives and strong growth prospects.

Q4-2024 Updates

Positive Updates

Strong Financial Performance in 2024

Adjusted EBITDA reached €480 million, up 11% year-on-year, with B2B adjusted EBITDA growing by 22% to €222 million. Group revenue increased by 5% to nearly €1.8 billion.

Landmark Agreements and Strategic Transformation

Sale of Snaitech to Flutter for €2.3 billion is expected to complete in Q2 2025, which will result in a special dividend of €1.7 billion to €1.8 billion. Revised strategic agreement with Caliplay received Mexican antitrust approval.

Significant Growth in Key Markets

B2B revenues grew 10%, driven by regulated markets and a 126% increase in the U.S. and Canada. Latin America revenues increased by 15%, with significant contributions from Wplay in Colombia.

Strong Cash Flow and Debt Reduction

Net debt reduced from €283 million to €143 million. A new €225 million revolving credit facility is set to take effect post-Snaitech sale.

Innovative Use of AI and New Strategic Priorities

Playtech is leveraging AI for operational efficiencies and rolling out cross-product AI solutions. Focus on regulated markets, particularly the U.S. and Brazil, with new medium-term adjusted EBITDA targets of €250 million to €300 million.

Negative Updates

Challenges with Underperforming Assets

Underperforming businesses generated €70 million in revenue but had €20 million EBITDA losses and €25 million negative free cash flow. The future of HappyBet is under review with potential closure or sale.

Margin Pressure in 2025

Margins expected to be lower in 2025 due to new terms of the Caliplay contract and accounting treatment of income from associates.

Asia Market Decline

Revenue in Asia declined, although it stabilized in the second half. China market contribution is now minimal due to strategic focus shift.

Impact of Brazilian Market Transition

Transition to a regulated market in Brazil led to high KYC rejection rates, impacting volumes and affecting revenues temporarily.

Company Guidance

During the call, Playtech provided detailed guidance and metrics regarding its financial performance and strategic priorities. For Fiscal Year 2024, adjusted EBITDA was reported at €480 million, an 11% increase year-on-year, driven by strong growth in the B2B division, which achieved an adjusted EBITDA of €222 million, up 22%. Group revenue grew by 5% to nearly €1.8 billion. The anticipated sale of Snaitech to Flutter for €2.3 billion is expected to close in Q2 2025, with a special dividend of €1.7 billion to €1.8 billion planned post-completion. Playtech's medium-term target for adjusted EBITDA of continuing operations is set between €250 million to €300 million, with a free cash flow target of €70 million to €100 million. The company reduced its net debt from €283 million to €143 million by the end of 2024, aiming for a net cash position by the end of 2025. Playtech also highlighted strong growth in the U.S. and Brazil, with U.S. revenue up 126% and plans to capitalize on strategic agreements and investments in emerging markets.

Playtech Financial Statement Overview

Summary

Playtech demonstrates a solid financial position with improved profitability and strong cash flow generation. The company has efficiently managed costs, leading to better profit margins despite a decrease in revenue. The balance sheet shows low leverage and a stable equity base, contributing to financial stability.

Income Statement

Positive

Playtech shows a fluctuating revenue trend with a notable decrease in 2024 to $848 million from $1,706.7 million in 2023. However, profitability metrics such as Net Profit Margin and EBIT Margin show improvement in 2024, indicating an efficient cost management strategy. The company also saw a significant increase in Net Income from $105.1 million in 2023 to $223.2 million in 2024, highlighting improved profitability.

Balance Sheet

Positive

The balance sheet is strong, with a healthy Debt-to-Equity Ratio of approximately 0.27 in 2024, indicating low leverage. Stockholders' Equity increased to $1,815.6 million, showing a stable equity position. The Equity Ratio is around 55%, suggesting a good proportion of equity financing. Assets have remained stable, ensuring a solid financial standing despite revenue fluctuations.

Cash Flow

Positive

Playtech's cash flow is robust, with a positive Free Cash Flow of $235.3 million in 2024, reflecting strong cash generation. Operating Cash Flow increased to $391.1 million, indicating efficient operations. The Free Cash Flow to Net Income ratio is healthy, supporting sustainable growth. Despite fluctuations in investing and financing activities, the overall cash flow position remains strong.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
848.00M	1.71B	1.60B	1.21B	1.08B
	Gross Profit
848.00M	771.90M	1.60B	1.21B	1.08B
	EBIT
124.70M	217.60M	203.80M	99.60M	10.72M
	EBITDA
316.50M	282.50M	376.60M	272.00M	212.50M
	Net Income Common Stockholders
223.20M	156.80M	87.60M	674.60M	-297.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
268.10M	516.20M	426.50M	575.40M	683.68M
	Total Assets
3.30B	3.33B	3.02B	3.65B	3.06B
	Total Debt
494.00M	732.90M	633.40M	1.13B	1.26B
	Net Debt
225.90M	216.70M	206.90M	556.80M	580.89M
	Total Liabilities
1.48B	1.52B	1.32B	2.07B	2.16B
	Stockholders Equity
1.82B	1.82B	1.70B	1.58B	899.59M
Cash Flow		Free Cash Flow
235.30M	216.90M	285.50M	110.80M	247.47M
	Operating Cash Flow
391.10M	366.90M	410.90M	225.00M	366.92M
	Investing Cash Flow
-188.40M	-309.50M	-358.30M	-127.60M	-89.35M
	Financing Cash Flow
-266.00M	39.90M	-566.90M	-218.40M	104.62M

Playtech Technical Analysis

Technical Analysis Sentiment

Positive

Last Price21.39

Price Trends

50DMA

20.46

Positive

100DMA

19.53

Positive

200DMA

18.98

Positive

Market Momentum

MACD

0.20

Positive

RSI

72.57

Negative

STOCH

>-0.01

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PYTCY, the sentiment is Positive. The current price of 21.39 is above the 20-day moving average (MA) of 21.39, above the 50-day MA of 20.46, and above the 200-day MA of 18.98, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 72.57 is Negative, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PYTCY.

Playtech Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNW	77 Outperform	$7.30B	21.98	46.19%	―	7.26%	54.83%
SGHC	77 Outperform	$4.82B	34.36	21.19%	1.68%	22.80%	281.38%
PYTCY	74 Outperform	$1.34B	26.90	6.35%	―	8.42%	―
RSI	71 Outperform	$3.03B	171.06	11.87%	―	29.86%	―
IGT	69 Neutral	$2.95B	10.15	1.33%	5.48%	-33.50%	35.81%
Sector *	62 Neutral	$6.82B	11.05	2.80%	4.32%	2.67%	-24.92%
DKNG	59 Neutral	$33.78B	―	-46.78%	―	22.86%	30.40%

* Consumer Cyclical Sector Average

Performance Comparison

PYTCY

Playtech

21.39

9.76

83.92%

IGT

International Game Technology

14.60

-4.82

-24.82%

LNW

Light & Wonder

82.14

-11.61

-12.38%

DKNG

DraftKings

36.50

-5.45

-12.99%

RSI

Rush Street Interactive

13.24

3.57

36.92%

SGHC

Super Group (SGHC)

9.50

6.31

197.81%

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.