Playmaker Capital is deeply undervalued, says Haywood

Haywood Capital Markets released an update to clients on Friday on Canadian digital sports media company Playmaker Capital (Playmaker Capital Stock Quote, Charts, News, Analysts, Financials TSXV:PMKR), with analyst Gianluca Tucci saying PMKR is punching above its weight in its category. Tucci maintained a “Buy” rating on the stock and C$1.10 target price, representing at press time a projected one-year return of 120 per cent.

Toronto-based Playmaker, which delivers content experiences through its sport media brands to connect sports fans with sports betting partner companies, announced on Thursday that its US-owned and operated business Yardbarker was named a top-ten Enterprise Media Outlet for its sports betting handicapping accuracy by sports ratings firm SharpRank. Yardbarker has a sports betting vertical with partner platform Oddschecker to allow sports bettors and fans to compare different betting markets and odds and helps convert users into sportsbook customers.

“Playmaker has made it a key objective to engage sports fans in newly regulating gaming markets and Yardbarker’s media properties have quickly become go-to sources for sports betting content and analysis in the US and Canada,” said Playmaker in a press release.

Commenting on the news, Tucci noted that the SharpRank list includes industry heavyweights including Better Collective, Penn National Gaming, New Corp and DraftKings, among others, all of which have multi-billion dollar market caps.

“With a ~C$100 million enterprise value, we continue to view PMKR as deeply undervalued for its quality media content and direct exposure to the high value sports better, of which its October 2022 Wedge Traffic acquisition is leading the charge,” Tucci wrote.

On Playmaker’s outlook, Tucci is forecasting upcoming fourth quarter 2022 revenue and adjusted EBITDA of $10.3 million and $3.8 million, respectively, while for 2023 he is calling for $39.4 million in revenue for a 24 per cent year-over-year growth rate and adjusted EBITDA at $14.0 million, representing 47 per cent year-over-year growth. (All figures in US dollars except where noted otherwise.)

The analyst said Playmaker’s M&A has a solid track record of 15 acquisitions to date and Tucci expects M&A to continue serving as a growth catalyst for the company, as it currently has the capacity to continue rolling up tuck-in acquisitions while integrating the larger Wedge Traffic.

Calling the value of the sports fan immense for the sports betting market, Tucci said, “The hyper-competitive nature of iGaming and the race for users is a solid tailwind for PMKR that should provide organic estimate/valuation support. Magna Global’s prediction of ad spend growth in 2023 to be the strongest across media/entertainment, travel and betting is a positive catalyst for PMKR.”