NYX Gaming’s move away from poker will drive growth, says M Partners

Ahead of the company’s forthcoming first quarter results, M Partners analyst Steven Salz thinks NYX Gaming is quietly making all the right moves.

Prior to the market open on May 30, NYX will report its Q1, 2017 results. Salz expects the company will post earnings of -$0.01 and EBITDA of $15.7-million on revenue of $57.5-million. The street consensus has the company earning $0.02 and posting EBITDA of $15.8-million on a topline of $58.4-million.

Salz says he feels NYX now has the right mix of gaming businesses, going forward.

“The company has positioned itself as a major B2B gaming provider with a diversified revenue stream, focusing on industry growth segments,” he says. “In Q4/16, NYX’s revenue breakdown was ~55% sportsbook, 38% casino gaming, and <3% poker, compared to ~78% casino and ~9% poker prior to the OpenBet acquisition. Recent results from B2B peers and B2C operators, several are NYX’s customers, have showed double digit YoY growth in sportsbook and casino, and single digit declines in poker. The company’s strategy to shift its focus towards industry growth segments of casino gaming and sportsbook, and away from sluggish poker is a central theme behind our thesis on NYX, driving significant organic revenue growth.”

In a research update to clients today, Salz maintained his “Buy” rating and one-year price target of $2.50 on NYX, implying a return of 119 per cent at the time of publication.

Salz thinks NYX will post Adjusted EBITDA of $75.3-million on a topline of $243.5-million in fiscal 2017.

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