Bragg Gaming keeps “Buy” rating at Haywood

Its fourth quarter results are in and Haywood analyst Gianluca Tucci still thinks there is money to be made on Bragg Gaming Group (Bragg Gaming Group Stock Quote, Chart, News, Analysts, Financials TSX:BRAG).

On March 20, BRAG reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of €4.7-million on revenue of €27.2-million, a topline that was up 16.3%, year-over-year.

“Revenue and Adjusted EBITDA grew sequentially for four straight quarters, culminating in record 4Q 2024 revenue of EUR 27.2 million, up 16.3% year-over-year, and Adjusted EBITDA of EUR 4.7 million rising by 68.1%,” CEO Matevž Mazij said. “Our investments in proprietary content and AI-enhanced platform capabilities are driving both revenue growth and improved profitability. As we execute our strategic plan in key markets like Brazil and the US, we’re leveraging our scalable platform and margin-accretive products to accelerate financial performance. The executive team we’ve assembled has already demonstrated their value through deals like our Caesars partnership, positioning Bragg for sustained revenue expansion and profit growth in 2025.”

Tucci offered his take on the results.

“BRAG reported a modest EBITDA beat in Q4/24 while reiterating guidance for 2025 which points to double digit revenue and EBITDA growth with expanding margins. We note while FCF was a €2.0M drain in 2024, one time cash costs amounting €3.7M were realized in the year. BRAG points to a shift toward higher margin product offerings driving EBITDA growth and points to anticipated growth in USA and Brazil as core to its revenue growth expectations. Its revenue guidance highlights a positive growth trajectory anchored by its proprietary and exclusive content. Markets such as Brazil and the USA are expected to be pivotal for this growth, with the Company well-positioned to capture a share of Brazil’s rapidly growing iGaming market and enhance its US market penetration through strategic partnerships with major operators like Caesars. The Company’s shift in focus from PAM to content is underscored by its robust pipeline of opportunities, and the newly introduced Stock Appreciation Rights (SAR) plan aligns management incentives with shareholder value. Overall, BRAG’s evolving content strategy and market expansion plans position it for strong growth, particularly in North America and Brazil, while its technological and data-driven initiatives further solidify its competitive edge. We believe BRAG is focused on growth in key metrics, such as FCF and FCF conversion, in the pursuit of elevating its level of attractiveness to investors and prospective suitors.”

In a research update to clients March 20, Tucci maintained his “Buy” rating and price target of $9.00 on BRAG.

The analyst thinks the company will Adjusted EBITDA of (All figures in €) 19.1-million on revenue of 117.8-million in fiscal 2025. He expects Adjusted EBITDA of 20.4-million on revenue of 129.6-million in fiscal 2026.

“We believe BRAG has a scalable B2B iGaming platform that should continue to grow in tandem with new market entrances, while penetrating deeper in existing, more mature overseas markets. Our target moves higher on raised estimates. Our C$9.00 DCF-based price target implies a 7.7x EV/EBITDA multiple on our 2025 estimates. BRAG is currently trading at a 5.4x EV/EBITDA multiple, on our 2025 estimates, versus its gaming technology vendors peer average of 9.0.”