RISKS: Search algorithm volatility; U.S./EU regulatory shifts in gambling; operator marketing budgets; integration risk (OddsJam/OpticOdds/Spotlight).
Discounted Cash Flow (DCF) Valuation
- Assumptions
- Discount rate (WACC): 10% (small-cap, digital media).
- FCF growth FY26: +15% (on FY25 cash generation + incremental data/SaaS; conservative vs. revenue guide).
- Forecast period: 1 year (to FY2026).
- Shares outstanding: ~35.7M.
- Free Cash Flow Projections
- FY2024 FCF: $13.2M.
- FY2025 FCF (est.): ~$30M (H1 FCF $15.8M; stronger H2 seasonality; low capex).
- FY2026 FCF: ~$34.5M (+15%).
- Discounted FCF: ~$31.4M (= 34.5 / 1.10) → ~$0.88/share (1-yr DCF signal).
- Market-cap cross-check (forward P/E / P/S):
- FY2025 adj. EPS run-rate: ~$1.64 (H1 adj. EPS $0.82 × ~2). FY2026 EPS ( +10% ) ≈ $1.80. Using 12–15× (performance-marketing peer band) ⇒ $22–$27.
- FY2025 P/S: at $8.25 → mkt-cap ≈ $294M; on $173M revenue mid-guide, P/S ~1.7× (reasonable vs. 2–3× for profitable ad/affiliate names).
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Disclaimer
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