Betting technology company Newgioco Group (Quote, Chart OTC:NWGI) is cheap compared to its global gaming peers, says Echelon Wealth Partners’ Ralph Garcea, who in a research update to clients on Friday reiterated his “Speculative Buy” rating and $1.80 target price for NWGI. Last week, Toronto-based Newgioco announced that it is in the process of obtaining the latest standard of GLI (Gaming Laboratories International) certification for its ELYS betting platform, already established in the Italian gaming jurisdiction. Company CEO Michele Ciavarella says that by commencing coding to obtain the certification puts ELYS well ahead of several larger competitors and will prepare it for launch into the lucrative US sports betting market. "We are very focused on being an early mover in this huge market with the ability to leverage one of the most technologically advanced betting software and proven operational know how to support to our U.S. clients sports betting business success,” says Ciavarella in a press release. “Newgioco has undertaken a logical and practical US licensing and certification plan and anticipates announcing further U.S. market developments in the near future.” Garcea says the certification will effectively break NWGI free from reliance on third-party providers and allow it to communicate independently with any gaming regulator’s control software. “The NWGI platform is among the most advanced in the sports betting world,” Garcea writes. “It guarantees efficiency, flexibility and innovative solutions to all operators who use its services. With over 150,000 events per season and more than 90,000 events in Live mode, the NWGI platform has been stress tested to handle 200,000 bets/minute.” The analyst points out that after the US Supreme Court decision earlier this year to allow individual states to decide on whether to allow sports betting, the industry (estimated at $149 billion in 2015) will now need three to five years to fully develop. Worldwide, Garcea states that the global gaming industry is still quite fragmented and with changes to the regulatory environment, consolidation will be the name of the game going forward. In terms of financials, Garcea says NWGI had a strong second quarter this year, which included the 15 days of World Cup games, producing revenue of $8.8 million and Adj. EBITDA of $1.1 million. (All figures in US dollars.) “Longer term, we expect EBITDA margins to trend toward 25 per cent as more users scale on the platform through organic and inorganic growth,” the analyst says. “We remind investors that the Italian marketplace is highly fragmented and retail operations are a necessity in this marketplace. We believe the Italian online market is where the UK market was 10 years ago, and the real growth is ahead of us.” Garcea says NWGI is currently trading at a 2019 his EV/Sales estimates and EV/EBITDA of 0.9x/6.6x his estimates versus its Global Gaming comparables at 2.4x/8.3x, respectively. The analyst expects Newgioco to produce revenue and EBITDA in 2018 of $35.4 million and $3.8 million, respectively, and revenue and EBITDA in 2019 of $39.2 million and $5.4 million, respectively. His $1.80 price target represents a projected 12-month return of 227 per cent at the time of publication.