PointsBet Holdings (PBH) - Winning streak

November 21, 2024

PointsBet Holdings provides sports, racing, and iGaming betting products and gaming support services through its cloud-based technology platform. The company operates through Australian and Canadian businesses, and a technology division.

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The company’s recent Sep-24 quarterly trading update was highlighted by healthy net win margins, especially in the Australian business, which reached 10.2%. Gross profit margin for the Aussie business was a robust52.4%, underpinned by a combination of product mix shift to sports and more efficient promotional spending, and despite the headwind of higher point-of-consumption(POC) taxes in effect since 1 July.

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The Canadian business also performed well, with strong growth in both sports wagering and iGaming net win metrics, which jumped 77%and 50%, respectively.

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Pleasingly, the company has reiterated its FY25 guidance, and we now forecast FY25 operating earnings (EBITDA) of $14.8 million, which is towards the upper end of management’s guidance. We retain our Buy rating, while our target price rises to $0.95 from $0.85.

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