Amaya Gaming gets new $39 target from Global Maxfin Capital

Amaya Gaming’s (TSX:AYA) second quarter is a demarcation point between the old and new company, says Global Maxfin Capital analyst Ralph Garcea.

On Thursday, Amaya Gaming reported its Q2, 2014 results. The company lost $2.89-million on revenue of $42.51-million, a topline that was up 14% over last year’s $37.25-million.

CEO David Baazov, said the quarter was one of transition after the landmark June 12th acquisition of Oldford Group Ltd., parent company of the Rational Group, which owned and operated the PokerStars and Full Tilt brands.

“The second quarter was a transformative period for Amaya as we announced and completed, well ahead of schedule, our acquisition of PokerStars and Full Tilt Poker, which collectively hold a healthy majority of the market share in on-line poker,” he said. “Led by its highly experienced management team, Rational Group provides Amaya with a strong platform for growth in revenues and profitability, and will be significantly accretive to our earnings.”

Garcea says things are about to get interesting for Amaya Gaming. He notes that online reports suggest PokerStars and Full Tilt could re-enter the US online gaming market in New Jersey as early as October of this year. Given the massive opportunity in U.S. online gaming, the analyst thinks the street is still underestimating the positive impact of Amaya’s recent acquisitions. He thinks it could generate a return on equity in the mid-20% range by the end of next year.

In a research update to clients Friday, Garcea maintained his “Strong Buy” rating, but raised his one-year target from $35.00 to $39.00, owing to its new growth initiatives. He is forecasting EBITDA of $116.2-million on revenue of $285.5-million for the company’s third quarter.

At press time, shares of Amaya were up .7% to $28.86.