Global Maxfin’s Ralph Garcea raises target on Amaya Gaming to $10

Global Maxfin analyst Ralph Garcea says Amaya Gaming’s (Amaya Gaming Stock Quote, Chart, News: TSXV:AYA) most recent deal is more evidence that the company is positioned for growth.

Yesterday, Amaya announced that it had entered into a memorandum of understanding with Aristocrat Technologies that will result in Aristocrat offering Amaya’s Ongame poker network platform to Aristocrat’s U.S. customers through its nLive on-line gaming platform.

Garcea says there are many catalysts for Amaya Gaming, not the least of which is the legalization of online gaming in the United States. He says the company has been growing by driving cross-functional sales and cost synergies from its recent acquisitions; Cryptologic, Cadillac Jack, and Ongame Networks, and has potenitally lucrative upcoming deals with brands such as Playboy Enterprises and Bally Technologies on deck.

In a research update to clients this morning, Garcea maintained his STRONG BUY rating on AYA, but raised his one-year target price to a street-high $10, implying a 50.6% return.

On Monday, Amaya Gaming reported its Q4 and fiscal 2012 results. In the fourth quarter, the company lost $711,309, or a penny a share, on revenues of $37.19-million. For the full year, it lost $7.11-million, or eleven cents a share, on a topline of $76.43-million. Both the company’s top and bottom lines bested street consensus.

Garcea thinks Amaya’s revenue will grow to $171.17-million in fiscal 2013, and to $204.89-million the year after that.

At press time, shares of AYA were down 1.2% to $6.56.

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