Codere Online (NasdaqCM:CDRO) One-Off Gain-Driven Profit Challenges Bullish Earnings Narrative

Codere Online Luxembourg (NasdaqCM:CDRO) has reported its H1 2025 results with total revenue of about €203.9 million over the trailing twelve months and basic EPS of €0.02, supported by net income of just over €1.0 million. The company has seen revenue move from €189.1 million to €203.9 million on a trailing twelve month basis, while EPS has shifted from a loss of €0.05 to a modest profit of €0.02. This highlights how small changes in profitability can meaningfully affect margins in this kind of business. With that backdrop, investors will be watching how sustainably Codere Online can defend and expand its margins as the latest half rolls into future periods.

See our full analysis for Codere Online Luxembourg.

With the headline numbers on the table, the next step is to line them up against the dominant market and community narratives to see which stories hold up under the latest margin picture and which ones start to look stretched.

Curious how numbers become stories that shape markets? Explore Community Narratives

€10.4m one off inflates 1.0m profit

• Trailing twelve month net income of about €1.0 million includes a single one off gain of €10.4 million that materially affects how clean those profits look.
• What stands out versus a bullish view that focuses on the move into profit is that underlying earnings power looks much thinner once the €10.4 million boost is stripped out, even though
  • reported basic EPS over the last 12 months is positive at about €0.02 after several loss making periods in 2023 and early 2024, and
  • five year profit growth has averaged 37.6 percent per year, which is being measured off a low base and is helped by the one off gain in the latest period.

Revenue up to €203.9m but growth pace modest

• On a trailing twelve month basis, total revenue has risen from €189.1 million to €203.9 million, while the separate analysis flags an expected forward growth rate of around 6.5 percent per year compared with a 10.7 percent rate cited for the broader US market.
• Consensus style expectations around Codere Online as a structural online gaming grower are partly challenged by that slower 6.5 percent growth outlook, because
  • recent semi annual data shows revenue at €87.0 million in H2 2023 stepping up to €98.6 million in H2 2024, yet the medium term forecast still sits below the 10.7 percent market level, and
  • the move from a trailing €189.1 million to €203.9 million of revenue suggests progress, but not the kind of rapid expansion some growth oriented investors might hope for in an online betting name.

📊 Read the full Codere Online Luxembourg Consensus Narrative.

Rich 80x P E against slower growth

• The shares are trading on a price to earnings multiple of 80.3 times compared with a peer average of 45.1 times and a US Hospitality industry average of 22 times, even though revenue is projected to grow at about 6.5 percent per year.
• Critics highlight that this elevated valuation looks demanding in light of the fundamentals, because
  • the same analysis compares the market price of 8.08 with a DCF fair value of 66.6859156777455, indicating a large gap between cash flow based value work and how the stock is currently priced, and
  • profitability over the past year is modest at about €1.0 million and partly shaped by the €10.4 million one off gain, which makes it harder to argue that an 80.3 times multiple is underpinned by durable earnings.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Codere Online Luxembourg's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

Codere Online’s thin underlying profitability, modest revenue growth and stretched valuation multiple all raise questions about how durable and compelling this investment case really is.

If paying a premium for shaky earnings bothers you, use our these 899 undervalued stocks based on cash flows to quickly shift your attention toward companies where cash flow and price are better aligned today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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