Five (more) things every investor should know about Aspire Global

Aspire Global has quietly built one of the world’s most comprehensive and intelligent iGaming platforms – across sports, aggregation, games and managed services. While it also operates B2C brands, the business is focused on a B2B strategy of growing its software and services platform, already powering more than 150 partners including Rush Street Interactive, 888, Betfair and GAN.

#1 – There is still potential in the share price
On the back of Aspire’s latest results, our lead analyst Russell Pointon has increased his fair value of Aspire to SEK110/share, which has increased by 10% since his note in early May, with EBITDA forecasts for FY21 and FY22 increased by a further 7%. Read the full analysis here.

#2 – Aspire’s strategy is working
Aspire has a broader portfolio of services than its peers. Horizontal and vertical integration means each division is winning more business from new and existing clients in more geographies, including large, cross-platform deals. A good illustration of the wisdom of this approach is the likely impact of 888’s acquisition of William Hill’s non-US assets. As 888 is already an Aspire client, any migration of platforms is likely to work strongly in Aspire’s favour.

#3 – We believe growth may outstrip management guidance
Management reiterated its FY21 guidance for revenue of €200m and EBITDA of €32m. However, Russell believes the guidance looks conservative, given H121 delivered revenue of €103.9m and EBITDA of €18.9m and, on a trailing 12-month basis, revenue of €188.3m and EBITDA of €33.3m.

Our FY21 forecast is for revenue of €215m, with EBITDA of €36.5m, 7% and 14% above management guidance, respectively.

#4 – Investors may not yet have caught up
Aspire Global continues to trade at a significant valuation discount to its peers. Its EV/EBIT of 10.2x in FY21 is at a 55% discount to the average of its peer group, excluding the loss-making companies.

#5 – There is global consolidation in the iGaming market
888’s William Hill deal is no one-off given the increasing scale of the major online gambling businesses. The total combined revenues of the five biggest operators is $16.4bn, an increase of more than 300% over just five years (Morgan Stanley Research, 2021). Many of Aspire’s shareholders are aware of this trend and its potential for Aspire’s share price. Watch Aspire CEO Tsachi Maimon discuss the consolidation here.

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