Is DoubleDown Interactive a buy right now?

DoubleDown Interactive (DoubleDown Interactive Stock Quote, Chart, News, Analysts, Financials NYSE:DDI) remains compelling according to Roth analyst Eric Handler, who reiterated his “Buy” rating and $16.00 price target.

Handler noted in his Feb. 12 report that the shares are trading below rising cash value, with net cash of $455-million, or $9.19 per share, at year-end 2025. At a recent price of $8.45, the stock is trading at an 8% discount to cash per share and at a negative enterprise value.

“DoubleDown remains an attractive special situation with its shares trading below its rising cash value,” Handler said, pointing to stable EBITDA, strong free cash flow generation and potential capital returns as key value drivers. His $16.00 target implies roughly 3x his 2026 Adjusted EBITDA estimate.

Fourth-quarter results were mixed. Revenue of $96-million, up 17% year-over-year, missed both Handler’s $104-million estimate and the $99-million consensus forecast. Adjusted EBITDA of $41-million, up 16%, topped his $40-million estimate and the $38-million consensus. Adjusted EBITDA margin slipped 40 basis points to 42.4% but exceeded his 38.3% forecast, supported by a 290-basis-point improvement in gross margin to 73.0%.

Core Social Casino revenue declined year-over-year, with Handler estimating the DoubleDown Casino segment at approximately $68-million, excluding roughly $12-million from the recently acquired WHOW Games. iGaming revenue of $16-million also came in below his $18-million forecast, likely reflecting slower user acquisition spending.

For 2026, Handler lowered his revenue forecast to $371.9-million, up 3% year-over-year from $377-million previously, while raising his Adjusted EBITDA estimate to $142.6-million, essentially flat year-over-year, from $141-million, implying a 38.3% margin, up from 37.5%. He expects approximately $135-million in operating cash flow, or about $2.70 per share, representing a 94% conversion of Adjusted EBITDA. For 2027, he models Adjusted EBITDA of $142.9-million on revenue of $370.9-million.

Handler said the company’s expanding direct-to-consumer (DTC) mix, which surpassed 30% of Social Casino revenue in the quarter, is supporting gross margin expansion. Management believes further DTC gains are achievable in 2026.

While iGaming growth offers an offset to a mature social casino market that Handler expects to decline at a mid-single-digit rate, he cautioned that a new UK remote gaming tax regime, raising the online casino profit tax rate to 40% from 21% effective April 1, could pressure margins at SuprNation, particularly in the near term.

Still, with nearly half of total assets in cash and projected free cash flow continuing to build the balance sheet, Handler believes the potential for accelerated capital returns could unlock meaningful value for shareholders.

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