Pollard Banknote (PBL) AI Stock Analysis

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Pollard Banknote

(TSX:PBL)

Rating:73Outperform

Price Target:

C$24.50

▲(11.57%Upside)

Pollard Banknote's strong financial performance and positive earnings call insights are the primary drivers of its stock score. Technical analysis suggests short-term bullish momentum, but caution is advised due to overbought signals. Valuation is balanced, with the P/E ratio and dividend yield supporting the stock's fair valuation.

Pollard Banknote (PBL) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$582.77M

Dividend Yield0.93%

Average Volume (3M)35.98K

Price to Earnings (P/E)14.6

Beta (1Y)0.45

Revenue Growth11.03%

EPS Growth18.83%

CountryCA

Employees2,470

SectorConsumer Cyclical

Sector Strength64

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)0.45

Shares Outstanding27,067,669

10 Day Avg. Volume39,106

30 Day Avg. Volume35,978

Financial Highlights & Ratios

PEG Ratio1.01

Price to Book (P/B)1.52

Price to Sales (P/S)0.00

P/FCF Ratio-14.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$35.50

Price Target Upside61.66% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Pollard Banknote Business Overview & Revenue Model

Company DescriptionPollard Banknote Limited, together with its subsidiaries, manufactures and sells a range of gaming products and services for the lottery and charitable gaming industries worldwide. The company operates through two segments, Lotteries and Charitable Gaming, and eGaming Systems. It designs, manufactures, and distributes instant tickets, as well as offers related services. The company also offers a range of bingo and bingo-related products; manufactures and sells pull-tab tickets, as well as pull-tab ticket vending machines and pull-tab ticket counting machines. In addition, it provides licensed games; and various solutions for licensed games, such as ticket design and manufacturing, prize structure consultation, merchandise selection and fulfillment, publicity and promotional opportunities, and second chance draw management. Further, the company offers lottery ticket dispensers and point-of-sale displays; charitable gaming machines; and lottery management services and information systems, as well as warehouse and distribution services to lotteries. Additionally, it engages in the interactive digital games and website development; and internet-based gaming businesses. The company was formerly known as 7510101 Canada Limited. Pollard Banknote Limited was founded in 1907 and is headquartered in Winnipeg, Canada. Pollard Banknote Limited is a subsidiary of Pollard Equities Limited.

How the Company Makes MoneyPollard Banknote makes money primarily through the production and sale of instant lottery tickets to government-run lotteries and charitable gaming organizations. The company generates revenue by designing, printing, and supplying these tickets, which are a popular product among lottery players. Additionally, Pollard Banknote offers ancillary services such as lottery management, marketing support, and digital solutions to enhance the gaming experience and drive ticket sales. Key revenue streams include contracts with various lottery jurisdictions globally, where Pollard Banknote provides customized lottery solutions tailored to the specific needs of each client. The company also invests in research and development to innovate new gaming products and enhance its digital offerings, contributing to its financial growth and market competitiveness. Significant partnerships with lottery operators and technology providers further bolster its revenue potential.

Pollard Banknote Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 8.18%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

Pollard Banknote's first quarter of 2025 showcased strong financial performance with significant growth in sales and net income, driven by successful iLottery implementation and joint venture achievements. However, challenges such as decreased instant ticket sales volumes, regulatory impacts on eTabs, and competitive pressures in Michigan iLottery tempered the overall performance.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Pollard Banknote achieved traditional GAAP sales of $146.2 million compared to $125.7 million in the first quarter of 2024, with combined sales revenue including the NeoPollard joint venture reaching $177 million compared to $151.2 million last year.

iLottery Expansion Success

Successful implementation and start-up of the Kansas iLottery solution, the fastest rollout in North America, showcasing Pollard's expertise in the lottery market.

NeoPollard Interactive Joint Venture

Record results were achieved in Q1 2025, with strong eInstants sales, especially in Virginia and North Carolina, leading to a $4 million increase in income from the joint venture.

Higher Average Selling Price

Significantly higher instant ticket average selling price increased sales by $17.1 million compared to 2024, mainly due to an increase in proprietary product sales and repriced contracts.

Adjusted EBITDA Growth

Adjusted EBITDA increased to $30.6 million in the first quarter compared to $23.7 million last year, driven by higher gross profit and increased equity investment income.

Positive Net Income Trend

Net income rose to $11.7 million from $6.9 million in the first quarter of 2024, with net income per share doubling from $0.26 to $0.43.

Negative Updates

Instant Ticket Sales Volume Decrease

Instant ticket sales volumes decreased by $5.8 million compared to the previous year due to declining production for low-margin accounts.

Regulatory Challenges Impacting eTab Revenue

Charitable eTab revenue decreased by $1.7 million due to regulatory changes in a major jurisdiction.

Michigan iLottery Revenue Decline

Lower Michigan iLottery sales decreased revenue by $1.5 million, reflecting increased competition in the Michigan market with private iCasino gaming operators.

Increased Administrative and Selling Expenses

Administrative expenses rose to $17.3 million from $15.4 million, and selling expenses increased to $6 million from $5.4 million, primarily due to higher compensation and software licensing costs.

Increased Accounts Receivable

Accounts receivable increased by $46 million, largely due to the timing of sales and customer payment terms.

Company Guidance

During the first quarter of 2025, Pollard Banknote Limited reported robust financial performance and significant operational milestones, contributing to their strategic goal of being a leader in the lottery and charitable gaming sectors. The company achieved traditional GAAP sales of $146.2 million, an increase from $125.7 million in the same period last year. The combined sales revenue, including their NeoPollard joint venture, reached $177 million compared to $151.2 million the previous year. Key drivers for this growth included a $17.1 million rise in instant ticket average selling prices and increased charitable gaming volumes by $4.4 million. Adjusted EBITDA rose to $30.6 million from $23.7 million, with net income increasing to $11.7 million, up from $6.9 million. The successful launch of the Kansas iLottery solution on February 13, 2025, illustrated Pollard's technological capabilities and leadership in the iLottery space, despite initial start-up costs affecting gross margins. The company also saw a $4 million rise in income from their NeoPollard joint venture, driven by strong eInstants sales in Virginia and North Carolina. Additionally, Pollard completed the acquisition of Pacific Gaming, enhancing their product offerings in the charitable gaming market. Overall, the company remains optimistic about its growth prospects, particularly in digital areas like iLottery and eInstants.

Pollard Banknote Financial Statement Overview

Summary

Pollard Banknote exhibits strong revenue and profit growth, indicative of robust operational performance. The balance sheet is stable, with manageable leverage and effective equity utilization. However, cash flow management poses a challenge, with declining free cash flow requiring strategic focus. Overall, the company is in a solid financial position, albeit with areas needing improvement.

Income Statement

Very Positive

Pollard Banknote has demonstrated strong revenue growth, with a noticeable increase from the previous periods. The gross profit margin has remained stable, indicating effective management of cost of goods sold. Net profit margin has improved, reflecting enhanced profitability. The EBIT and EBITDA margins show solid operating performance, further supporting a positive outlook.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio, suggesting a balanced leverage. Return on equity is healthy, driven by consistent net income growth, indicating efficient use of equity. However, the equity ratio shows a moderate reliance on liabilities, which requires close monitoring.

Cash Flow

Positive

The cash flow statement shows fluctuating free cash flow, with recent periods experiencing a decline. Operating cash flow remains positive, supporting ongoing operations, but the free cash flow to net income ratio suggests potential pressure from capital expenditures. Overall, cash flow management requires attention to ensure sustainable growth.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
577.62M	557.10M	520.44M	482.28M	459.01M	414.13M
	Gross Profit
108.63M	104.72M	86.58M	81.82M	91.10M	91.05M
	EBIT
74.78M	69.81M	46.02M	34.19M	33.52M	50.04M
	EBITDA
105.13M	106.66M	93.05M	49.18M	59.31M	80.86M
	Net Income Common Stockholders
40.00M	35.20M	31.42M	19.28M	19.70M	33.29M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
26.13M	22.36M	8.41M	1.48M	3.52M	1.89M
	Total Assets
687.87M	636.31M	515.71M	499.27M	461.40M	404.57M
	Total Debt
215.17M	168.52M	137.23M	135.28M	131.70M	148.02M
	Net Debt
189.04M	146.16M	133.90M	133.80M	128.18M	146.13M
	Total Liabilities
339.67M	302.17M	240.91M	247.33M	254.45M	262.18M
	Stockholders Equity
348.20M	334.13M	274.80M	251.93M	206.96M	142.38M
Cash Flow		Free Cash Flow
-36.09M	19.92M	26.53M	-2.82M	21.71M	40.72M
	Operating Cash Flow
22.73M	73.90M	64.63M	30.40M	56.54M	59.65M
	Investing Cash Flow
-82.30M	-77.19M	-52.09M	-24.57M	-60.59M	-61.67M
	Financing Cash Flow
73.46M	16.81M	-10.94M	-7.73M	6.37M	-3.94M

Pollard Banknote Technical Analysis

Technical Analysis Sentiment

Positive

Last Price21.96

Price Trends

50DMA

19.58

Positive

100DMA

22.48

Negative

200DMA

23.55

Negative

Market Momentum

MACD

0.45

Negative

RSI

68.57

Neutral

STOCH

92.54

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PBL, the sentiment is Positive. The current price of 21.96 is above the 20-day moving average (MA) of 20.18, above the 50-day MA of 19.58, and below the 200-day MA of 23.55, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 68.57 is Neutral, neither overbought nor oversold. The STOCH value of 92.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PBL.

Pollard Banknote Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PBL	73 Outperform	C$582.77M	14.58	12.45%	0.93%	11.03%	18.83%
Sector *	62 Neutral	$6.84B	11.41	2.80%	3.87%	2.70%	-24.58%
EXCOF		$186.79M	9.85	6.86%	6.17%	―	―
MRETF		$445.84M	5.32	-3.98%	2.35%	―	―
TCL.B	77 Outperform	C$1.76B	9.84	9.65%	4.28%	-2.58%	100.21%
TCL.A	76 Outperform	C$1.76B	9.88	9.65%	4.26%	-2.58%	100.21%
ACQ	63 Neutral	C$525.97M	―	9.31%	―	-18.16%	-275.09%

* Consumer Cyclical Sector Average

Performance Comparison

TSE:PBL

Pollard Banknote

21.96

-9.42

-30.02%

EXCOF

Exco Technologies

4.91

-0.55

-10.07%

MRETF

Martinrea International

6.13

-2.48

-28.80%

TSE:ACQ

AutoCanada

22.44

1.97

9.62%

TSE:TCL.A

Transcontinental

21.16

7.74

57.68%

TSE:TCL.B

Transcontinental Inc. Class B

21.17

7.78

58.10%

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.