We Think Gambling.com Group's (NASDAQ:GAMB) Robust Earnings Are Conservative

Gambling.com Group Limited (NASDAQ:GAMB) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

View our latest analysis for Gambling.com Group

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Gambling.com Group's profit was reduced by US$8.0m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If Gambling.com Group doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Gambling.com Group's Profit Performance

Unusual items (expenses) detracted from Gambling.com Group's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Gambling.com Group's statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS over the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you'd like to know more about Gambling.com Group as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Gambling.com Group you should know about.

Today we've zoomed in on a single data point to better understand the nature of Gambling.com Group's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.