How Aspire Global made Christmas arrive early
Having built one of the world’s most comprehensive and intelligent iGaming platforms – across sports, aggregation, games and managed services – Aspire Global (ASPIRE:ST) is attracting increased attention, with its share price up 89% year to date. Its software and services platform powers more than 150 partners including William Hill, Rush Street Interactive, 888, Betfair and GAN.
Aspire recently reported Q321 results, and the strength of its expansion across multiple geographies can be seen in its financial performance. On a trailing 12-month basis, both revenue and EBITDA exceeded management’s prior FY21 guidance. And once the disposal of its B2C arm is finalised, the group should be well-placed to invest in continued growth.
Below are five key highlights from Aspire’s progress that indicate its Christmas arrived early. For a complete analysis read the latest from Edison Investment Research.
#1 – Revenue growth is accelerating
In Q321, Aspire’s revenue increased c 46% year-on-year (y-o-y ) to €58.6m. Organic growth was at c 39% y-o-y, up from c 28% in H121. Perhaps most significantly, Aspire’s revenue for the 12 months to September 2021 rose to €207m, which is above management’s previous guidance of €200m for FY21.
#2 – Profits are following close behind
EBITDA in Q321 was up 38% to €9.1m, delivering a 15.5% margin. While this represents a margin decline versus Q320 and H121, it was solely attributable to higher gaming taxes following regulatory changes in Germany. Aspire’s EBITDA of €36m in the 12 months to September 2021 also exceeded management’s prior FY21 guidance of €32m.
#3 – Future confidence continues to grow
Edison Investment Research ’s lead consumer analyst Russell Pointon is optimistic about Aspire’s prospects. He has upgraded his revenue forecasts for FY21 by c 1% to €218.0m and by 3% in FY22 to €248.4m. This represents year-on-year growth of c 35% and c 14% respectively. Meanwhile, his EBITDA forecasts are up in both years too, by 2–3%, suggesting year-on-year growth of c 37% and 19% respectively.
#4 – The valuation has increased
On a discounted cash flow basis, Edison Investment Research now values Aspire at SEK116/share, up from SEK110. According to the latest note: “The shares continue to trade at a significant discount to peers and an EV/EBIT for CY21 of 12.2x is a discount of 43% to the adjusted peer average of 21.5x. Our analysis shows a relative de-rating to the peers once the proposed disposal of B2C is considered, which appears unwarranted given the expected improvement in AG’s growth prospects and profitability.”
#5 – Global consolidation in the iGaming market continues
888’s William Hill deal was 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.
Thank you for reading. What next? Read the original article: Seven Things Every Investor Needs To Know About Aspire Global or take a deep dive into the business’s prospects via Edison’s full coverage.
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