Super Bowl will be a win for Playmaker Capital, says Haywood

Super Bowl Sunday has Haywood Capital Markets analyst Gianluca Tucci staying bullish on Canadian digital sports media company Playmaker Capital (Playmaker Capital Stock Quote, Charts, News, Analysts, Financials TSXV:PMKR) in a Friday note to clients. Tucci said there’s a strong market environment in US sports betting for companies like Playmaker and the NFL’s SuperSunday should add to PMKR’s growth over the first quarter of the year.

Playmaker owns a collection of sports media brands aimed at delivering content to engaged audiences of sports fans, sports betting companies, leagues, teams and traditional advertisers. Tucci characterizes Playmaker as living at the crossroads of traditional advertisers and iGaming companies, both of which are seeing the value of tapping into PMKR’s audience.

“As we look forward, the hyper-competitive nature of iGaming and the race for users is a solid tailwind for PMKR that should provide organic estimate/valuation support,” Tucci wrote. “PMKR has been operating profitably on a trailing basis since its listing, and while we look for incremental investments in growth, we do not anticipate this to change.”

Tucci said he is raising his estimates on the back of robust tailwinds in iGaming, pointing in particular to continued market expansion in the US and the value of PMKR’s recent acquisition, pure-play iGaming affiliate business Wedge Traffic, which should benefit from the increased traffic around the Super Bowl. Tucci recounted predictions from the American Gaming Association which call for a record 50.4 million American adults (20 per cent of the populations) expected to bet on Super Bowl LVII on Sunday, with a full $16 billion expected in wagers on the event, more than double that of last year’s Super Bowl.

“The growth reflects both the popularity of the game and the growth in legalized betting in the US,” Tucci wrote. “More than half of American adults (57 per cent) now live in a live, legal sports betting market, with 33 states and Washington, DC, currently featuring live, legal sports betting markets. Three additional legal markets are awaiting launch.”

As for Playmaker’s numbers, Tucci is now forecasting 2023 revenue and adjusted EBITDA at $44.0 million and $14.7 million, respectively (previously $39.4 million and $14.0 million, respectively). For 2024, his estimates are for revenue and EBITDA of $48.4 million and $17.7 million, respectively. (All figures in US dollars except where noted otherwise.)

With the update, Tucci reiterated a “Buy” rating on Playmaker Capital and maintained a 12-month target of C$1.10 per share, which at the time of publication represented a projected return of 93 per cent.