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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 B2B2C strategy of growing its software and services platform, already powering more than 150 partners including Rush Street Interactive, 888, Betfair and GAN.
These are the seven things Edison believes every investor should know about Aspire Global:
- There’s difficult-to-ignore potential in the share price
Our analyst Russell Pointon values Aspire at SEK100/share, on a discounted cashflow basis. As of 6 May 2021, this provided an upside of 41% against the market price. The same analysis also suggests Aspire’s FY21 P/E multiple is 12.6x – a 71% discount to its peers.
- Revenue growth is firmly double-digit
Aspire has gotten into the habit of delivering significant growth. As Russell’s note ‘Yet Another Record Quarter’ explains, Q121 saw a 42.6% year-on-year uptick in revenues, with all business units up sequentially, quarter-on-quarter.
- Margins are also rising
It’s not just sales on the march. The EBITDA margin increased to 17.8%, up from 15.5% in Q120. Why? Because Aspire is leveraging lower average costs from the market power, which comes from strong growth. The sales mix is also starting to skew more favourably towards higher-margin products: the Games and Sports offerings.
- The balance sheet is strong
The improved profitability saw operating cash flow almost treble year-on-year. Using existing cash and loans, Aspire repaid €27.5m of senior secured bonds in April 2021.
- Aspire continues to extend its reach
With a presence in 26 regulated markets and counting, new operators are being added in major territories such as the US and UK, with continued potential to grow market share. Aspire has also recently completed successful acquisitions and is open to more as needed.
- ESG is firmly on the agenda
The board produces an annual sustainability report and is committed to providing a nurturing culture for colleagues, as well as a safe environment for all players of its iGaming products.
- Success is becoming a trend
There is no obvious reason why Aspire’s performance would fall back. It appears to have found a winning formula. If management continues to execute well on strategy, the valuation gap versus peers will almost certainly narrow. To find out more about Aspire Global, read Edison’s coverage, or visit the company’s investor relations website.
Aspire Global is a client of Edison Group.