NYX Gaming’s (NYX Gaming Stock Quote, Chart, News: TSXV:NYX) acquisition of OpenBet was the focus of the company’s recent first quarter results and demonstrates its M&A prowess, says Global Maxfin Capital analyst Manish Grigo.
Last Thursday, NYX reported its Q1, 2016 results. The company lost $9.13-million on revenue of $18.8-million, a topline that was up 88.7 per cent over the same period last year, but a million dollars shy of Grigo’s expectation.
“We are very proud that Q1 not only marks another strong quarter but is also a confirmation of our long-term strategy to be the leading provider of digital gaming content and technology worldwide,” said CEO Matt Davey. “Through our highly successful merger and acquisition activity, we have set in place the building blocks for our global business and are now focused on realizing our full potential for the benefit of our customers and shareholders.”
Grigo says the focus of the quarter, for him, was the completion of the acquisition of U.K.-based sportbook and digital gaming provider OpenBet for £270 million. He says he believes the market is overlooking the long-term fundamentals on NYX gaming, including high free cash flow growth with very low capital expenditure requirements. The analyst thinks the company has the touch when it comes to acquisitions.
“We believe management has shown a lot of discipline in growing through acquisitions,” says Grigo. “Over the last two years NYX has completed four acquisitions, been ahead of schedule in terms of getting cost synergies, and at the same time maintained a healthy organic growth of over 35%.”
In a research update to clients Friday, Grigo maintained his “Buy” rating and but lowered his one-year price on the stock from $7.50 to $5.50.