Expect a better second half from Amaya Gaming, says Cantor Fitzgerald

Amaya Gaming’s (Amaya Gaming Stock Quote, Chart, News: TSXV:AYA) Q2 results were a bit softer than he expected, but Cantor Fitzgerald analyst Justin Kew says he believes the company’s remaining two quarters this year will be better.

Yesterday, after market, Amaya Gaming reported its Q2, 2013 results. The company lost $11.44-million on revenue of $37.25-million, a 156% bum over the $14.54-million topline the company posted in last year’s Q2. Amaya’s EBITDA came in at $10.2-million.

Kew notes that Amaya’s Q2 revenue and EBITDA were both below his expectations and the street consensus. He had been expecting revenue of $38.4-million and EBITDA of $11.8-million, the street was looking for revenue of $39.3-million, and EBITDA of $12-million.

Despite the lackluster quarter, Kew says there are reasons to believe that Amaya’s second-half performance will be better. He points to the company’s recently inked deal with the California Nations Indian Gaming Association, its expansion in Mexico, its expanded mybet/Ongame agreement, and the fact that the stock will graduate to the TSX later this year, as potential catalysts.

In a research update to clients this morning, Kew maintained his BUY rating but lowered his 12-month target price to $8.50 from $9.00 because of the softer than expected Q2.

Kew says he is still bullish on the potential of Amaya’s Cadillac Jack division. He thinks the company’s entry into the Class Three slot machine market, in particular, “…opens up significant opportunities to accelerate growth”.

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