Last Update 22 Feb 26

Fair value Decreased 17%

BETS B: Future Buybacks And Dividend Will Offset Softer Outlook

Analysts have reduced their price target on Betsson from SEK 120.0 to SEK 100.0. They now apply a higher discount rate, assume lower revenue growth and margins, and use a higher future P/E in response to more cautious research commentary, including a recent downgrade from Pareto.

Analyst Commentary

Bearish analysts are signaling a more cautious stance on Betsson, with the reduced price target to SEK 100.0 reflecting a tighter view on what they are willing to pay for the shares.

They are flagging a mix of valuation pressure, execution questions, and growth uncertainty that, in their view, makes the risk and reward profile less attractive at previous target levels.

Bearish Takeaways

The cut in the price target, from SEK 120.0 to SEK 100.0, points to reduced confidence in the multiple investors might be willing to pay, especially as analysts now assume a higher future P/E to reflect increased perceived risk.
Lower revenue growth and margin assumptions indicate concern that Betsson may find it harder to deliver on prior expectations, which could make it more challenging to support earlier valuation levels.
The higher discount rate applied in recent research highlights a view that Betsson’s future cash flows should be treated as riskier, which mechanically lowers valuation estimates.
The recent downgrade and more cautious commentary suggest that bearish analysts see a greater chance of execution or growth setbacks, and they are adjusting their models to avoid relying on more optimistic scenarios.

What's in the News

The Board of Directors proposed an ordinary dividend of €0.66 per share for 2025, compared with €0.657 per share for 2024 (Key Developments).
Betsson completed a share buyback tranche, repurchasing 943,944 shares, representing 0.68% of the company, for €12.5 million under the program announced on November 3, 2025 (Key Developments).
For the fourth quarter of 2025, Betsson issued guidance for revenue of €304 million, compared with €307 million in the fourth quarter of 2024 (Key Developments).
Operating income (EBIT) for the fourth quarter of 2025 is guided at €53 million, compared with €70 million in the fourth quarter of 2024 (Key Developments).

Valuation Changes

Fair Value: SEK 120.0 to SEK 100.0, indicating a reduction of around 17% in the assessed share value.
Discount Rate: 6.58% to 6.79%, a slight increase that implies a higher required return on future cash flows.
Revenue Growth: 5.41% to 4.41%, a more modest expected pace of revenue expansion in analysts' models.
Net Profit Margin: 17.64% to 11.93%, a sizeable cut in expected profitability on sales.
Future P/E: 7.58x to 9.62x, a higher valuation multiple assumed on future earnings despite the lower fair value estimate.

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Key Takeaways

Rising regulatory pressures, higher gaming taxes, and ESG compliance are compressing margins and limiting long-term profitability and expansion potential.
Operational risks from dependence on third parties and intense industry competition threaten revenue growth, cost efficiency, and market share retention.
Strong geographic diversification, growing B2B revenue streams, and strategic tech investments are driving sustainable earnings growth, operational efficiency, and robust financial stability.

Catalysts

About Betsson

Through its subsidiaries, invests in and manages online gaming business in the Nordic countries, Latin America, Western Europe, Central and Eastern Europe, Central Asia, and internationally.What are the underlying business or industry changes driving this perspective?

The increasing proportion of revenues derived from locally regulated markets is driving up gaming tax expenses, leading to ongoing gross margin and EBIT margin compression; as more countries implement or raise taxation and regulatory requirements, Betsson will face structurally lower profitability in the coming years, directly weighing on long-term earnings growth.
Intensifying regulatory scrutiny in key regions and the slow pace of license approvals, such as the stalled acquisition in the Netherlands and new markets like Brazil and Paraguay contributing little initial revenue, threaten to undermine future top-line growth and create risk of abrupt license revocations or unfavorable changes to operating conditions, further increasing volatility in group revenues.
Heightened ESG concerns and the tightening of responsible gaming frameworks, compounded by Betsson's need to align with CSRD and ongoing societal pressures, could lead to a higher cost of capital, additional compliance costs, and limited access to certain markets, exerting pressure on net margins and restricting future expansion opportunities.
As Betsson continues aggressive geographic and product expansion, the company's growing dependence on third-party suppliers and rapid integration of recent acquisitions could result in higher operational costs, inability to achieve expected synergies, technology disruptions, or even goodwill impairment, likely weighing down net income and earnings per share.
Across the broader online betting industry, fierce competition from both established global players and tech-driven entrants is escalating marketing spend and driving down customer acquisition effectiveness; if Betsson is unable to innovate rapidly or defend its market share in key segments like mobile and live betting, revenue growth rates will slow and margins will be squeezed.

Betsson Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more pessimistic perspective on Betsson compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
The bearish analysts are assuming Betsson's revenue will grow by 7.5% annually over the next 3 years.
The bearish analysts assume that profit margins will increase from 16.3% today to 19.5% in 3 years time.
The bearish analysts expect earnings to reach €279.0 million (and earnings per share of €2.02) by about July 2028, up from €188.2 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 8.0x on those 2028 earnings, down from 12.6x today. This future PE is lower than the current PE for the GB Hospitality industry at 18.1x.
Analysts expect the number of shares outstanding to grow by 0.42% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.55%, as per the Simply Wall St company report.

Betsson Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Betsson is experiencing double-digit year-over-year growth in both deposits and revenue, with group revenue rising 18% and EBIT up 11%, indicating continued expansion of top-line and bottom-line financials despite absorbing higher gaming taxes.
The company is making successful entries into newly regulated and high-growth markets such as Brazil, Argentina, Paraguay, and Poland, which not only diversifies geographic risk but also positions Betsson for sustainable revenue growth as these markets ramp up their contribution.
The B2B segment is expanding rapidly, now representing 31% of group revenue and growing over 30%, with a more diversified customer base, which decreases concentration risk and creates a recurring, stable revenue stream to underpin earnings.
Investments in proprietary technology, product development, and exclusive content (e.g., unique games in Argentina, enhanced live betting) are driving operational efficiency, improving user experience and engagement, and supporting robust net margins and customer retention.
Operating cash flow and earnings per share are demonstrating strong positive momentum, with operating cash flow reaching all-time highs and a net cash position of €178 million on a robust balance sheet; this financial strength enables ongoing investments in growth and continued returns to shareholders, supporting long-term EPS and value creation.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bearish price target for Betsson is SEK150.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Betsson's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK200.0, and the most bearish reporting a price target of just SEK150.0.
In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be €1.4 billion, earnings will come to €279.0 million, and it would be trading on a PE ratio of 8.0x, assuming you use a discount rate of 6.6%.
Given the current share price of SEK194.1, the bearish analyst price target of SEK150.0 is 29.4% lower. Despite analysts expecting the underlying buisness to improve, they seem to believe the market's expectations are too high.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Rising Gaming Taxes And Regulation Will Curtail Prospects