Amaya gets target raise to street high $52.00 at Dundee

There were a lot of data points to consider in Amaya’s (Amaya Stock Quote, Chart, News: TSX:AYA) fourth quarter and fiscal 2014 results, but the most important ones were positive, says Dundee Capital Markets analyst Eyal Ofir.

“We completed our transformation into an on-line consumer technology leader in 2014 with the successful integration of PokerStars and Full Tilt into Amaya,” said CEO David Baazov. “The strength and vitality of the platforms supported strong growth and innovation, highlighted by the launch of Spin & Go’s on PokerStars, and delivered strong customer growth, with more than two million new customers registered during the fourth quarter. Additionally, we continued to expand our casino offerings, while making investments in IT and R&D to prepare for geographic and product growth”.

Ofir says Amaya’s fourth quarter results were generally in line with his expectations, with a slight miss on the topline and a better than expected bottom line. He notes that the company showed a solid performance with its casino business, confirmed the launch of a sportsbook and fantasy sports business, and showed innovation and a geographic expansion with its poker business.

The analyst says the bottom line is that key metrics are trending in the right direction for Amaya.

“For us, while there were many takeaways, we would highlight that the company has increased its player base by more than two million, has continued to experience cross sell in excess of 30% onto its casino platform, and is experiencing 2x the average poker player yield on its Full Tilt casino offering and approximately 1.5x on its PokerStars casino prior to launching a slots offering,” he said.

In a research update to clients yesterday, Ofir maintained his “Buy” rating on Amaya, but raised his one year target from $46.00 to $52.00, implying a return of 68% at the time of publication.