Jefferies Praises Gambling.com’s OddsJam Acquisition, Reiterates Buy Rating
Gambling.com, a fast-growing provider of digital marketing services to the global online gambling industry, recently announced its historic acquisition of B2C company OddsJam. The transaction has since received acclaim from business experts, including Jefferies Equity Research.
Gambling.com’s Business to Surge, Analyst Believes
Jefferies Equity Research analyst David Katz expressed confidence that the deal will benefit Gambling.com. CDC Gaming reported that a December 12 investor note contained Katz’s thoughts on the arrangement, outlining that he expects the deal to be “immediately accretive to both earnings and margins.”
According to the expert, the M&A deal should grow Gambling.com’s business by some 20% in 2025. As a result, Katz reiterated a Buy rating on GAMB shares and increased his price target from $18 to $20 per share.
The analyst also expects Gambling.com’s revenues to increase following the merger and set a target of $173 million (previously $142 million) for 2025. The cash flow target, on the other hand, was raised from $53.9 million to $67.8 million.
The Jefferies analyst said that there is a lot to like about the deal, which will provide Gambling.com with relevant growth. He also praised the company for its recent share buyback, which saw it obtain 3 million GAMB shares at a price of $10 per share, which will now be redeployed for $15 apiece.
The Deal Will Broaden Gambling.com’s Horizons
For context, Gambling.com purchased OddsJam for $160 million, $80 of which will be paid upfront. As per the terms of the agreement, the upfront agreement will include $10 million in Gambling.com stock in addition to cash. The deal is expected to close on January 1.
If OddsJam’s cash flow doubles by 2026, it will be eligible to receive an additional $80 million. While Katz is uncertain whether the company will be able to increase its revenue sufficiently, he still projected a revenue and cash flow increase of 20% for the business.
In any case, the addition of OddsJam to the broader Gambling.com portfolio was described as а great opportunity for the latter company. Katz expects the acquisition to diversify Gambling.com’s abilities as a company at a crucial time for the online sports betting and iGaming industries.
Additionally, considering that OddsJam services some 300 sports betting operators worldwide, the deal will allow Gambling.com to broaden its horizons.
