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1. Company Snapshot

1.a. Company Description

Playtech Plc, a technology company, provides gambling software, services, content, and platform technologies worldwide.The company offers technologies across various product verticals, including casino, live casino, sports betting, virtual sports, bingo, and poker.It also owns the intellectual property rights and licenses the software; provides marketing and advertising, consulting and online technical support, data mining processing, turnkey, operational and hosting, live game, and video stream services; and operates betting shops.


In addition, the company designs, develops, and sells software.Playtech Plc was founded in 1999 and is based in Douglas, the Isle of Man.

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1.b. Last Insights on PTEC

Playtech's recent performance was driven by a 9.9% year-over-year revenue increase to €848.0m in its Full Year 2024 Results, despite a net loss. The company's strong financial health, as indicated by its robust revenue growth, suggests potential for future growth. Additionally, Playtech's intrinsic value estimate of UK£3.91, as calculated by 2 Stage Free Cash Flow to Equity, indicates that the company may be undervalued. Furthermore, the company's high insider ownership, with up to 38% of shares held by insiders, signals confidence in the company's long-term potential and alignment of interests between management and shareholders.

1.c. Company Highlights

2. Playtech Earnings Report Analysis

Playtech delivered a robust financial performance in 2024, with adjusted EBITDA reaching €480 million, an 11% year-on-year increase and exceeding market expectations. Revenue rose 20% to €1.3 billion, driven by strong growth in the B2B segment, which contributed €754 million, up 11% YoY. The company's focus on high-growth markets, such as the U.S. and Latin America, has been a key driver of this momentum. Margins improved, with adjusted EBITDA margin expanding 300 basis points to 36.5%, reflecting operational efficiency and cost control measures. The company also announced a special dividend of €1.7–€1.8 billion following the sale of Snaitech to Flutter, further enhancing shareholder returns.

Publication Date: Mar -28

📋 Highlights
  • Strong Financial Performance:: Adjusted EBITDA reached €480 million, up 11% year-on-year, surpassing expectations, driven by B2B growth.
  • Snaitech Sale and Dividend:: Snaitech was sold to Flutter for €2.3 billion, with a special dividend of €1.7–€1.8 billion expected post-closure.
  • B2B Division Growth:: B2B division saw EBITDA rise 22% to €222 million, supported by broad-based growth and improved operating leverage.
  • Market Expansion Focus:: Playtech is targeting high-growth markets like the U.S., Brazil, Mexico, and Colombia, with strategic partnerships and tailored content.
  • Medium-Term Targets:: The company aims for adjusted EBITDA of €250–€300 million and free cash flow of €70–€100 million, reflecting confidence in future growth.

Key Performance Drivers

The B2B division was a standout performer, with adjusted EBITDA rising 22% to €222 million. This growth was bolstered by broad-based expansion across core markets, including the U.S., where revenue surged over 150%. Playtech's strategic divestment of Snaitech and the revised Caliplay agreement have positioned the company to focus on its core B2B business and capitalize on growth opportunities in regulated markets. The company's progress in live casino, platform solutions, and safer gambling initiatives further underscore its leadership in the industry.

Financial Position and Valuation

From a valuation perspective, Playtech's trailing P/E ratio of 24.32 reflects investor optimism about its growth prospects, while its EV/EBITDA of 7.73 suggests a premium valuation relative to peers. The company's return on invested capital (ROIC) of 4.58% highlights its ability to generate returns from its capital base, though there is room for improvement. Playtech's focus on debt reduction and strategic investments, as highlighted by CFO Chris McGinnis, will be critical in driving future growth and enhancing shareholder value.

Strategic Initiatives and Growth Outlook

Looking ahead, Playtech's medium-term targets of €250–€300 million in adjusted EBITDA and €70–€100 million in free cash flow reflect its confidence in its ability to sustain growth while maintaining financial discipline. The sale of Snaitech and the planned refinancing of bonds further reinforce its commitment to optimizing its capital structure. With a net debt-to-EBITDA ratio of 0.45, Playtech is well-positioned to pursue its growth initiatives while maintaining a strong balance sheet.

3. NewsRoom

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Are Investors Undervaluing Playtech plc (LON:PTEC) By 39%?

Nov -11

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Playtech stock plunges 30% after Evolution names it in legal complaint

Oct -21

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.89%)

6. Segments

Business to Consumer

Expected Growth: 4.5%

Playtech plc's 4.5% growth in Business-to-Consumer (B2C) segment is driven by increasing online gaming adoption, strategic partnerships, and geographic expansion into regulated markets. Additionally, the company's focus on mobile gaming, innovative products, and strong brand portfolio have contributed to its growth momentum.

Business to Business

Expected Growth: 5.5%

Playtech plc's 5.5% B2B growth is driven by increasing demand for online gaming, strategic partnerships, and expansion into new markets. The company's omnichannel platform and innovative products also contribute to growth, as well as the rising popularity of mobile gaming and the growing trend of online betting.

7. Detailed Products

Casino Games

Playtech offers a wide range of casino games including slots, table games, and live dealer games

Sports Betting

Playtech provides a sports betting platform that allows operators to offer a comprehensive sportsbook to their customers

Poker Network

Playtech's poker network allows operators to offer a shared poker liquidity pool to their players

Bingo

Playtech offers a bingo platform that allows operators to offer a variety of bingo games and promotions to their players

Financial Trading

Playtech's financial trading platform allows operators to offer CFDs, forex, and binary options trading to their customers

Information Management Solution (IMS)

Playtech's IMS provides a comprehensive platform for operators to manage their online gaming operations

Playtech Open Platform (POP)

Playtech's POP provides a platform for operators to integrate multiple gaming content providers

8. Playtech plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Playtech plc faces moderate threat from substitutes, as online gaming platforms and digital entertainment options are increasing, but the company's strong brand and diversified product offerings mitigate this threat.

Bargaining Power Of Customers

Playtech plc's customers have low bargaining power due to the company's strong brand and diversified product offerings, making it difficult for customers to negotiate prices or terms.

Bargaining Power Of Suppliers

Playtech plc's suppliers have moderate bargaining power, as the company relies on a few key suppliers for its technology and infrastructure, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

Playtech plc faces a high threat from new entrants, as the online gaming industry is attractive and has low barriers to entry, but the company's strong brand and established market position provide some protection.

Intensity Of Rivalry

Playtech plc operates in a highly competitive industry, with many established players and new entrants, leading to intense rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.86%
Debt Cost 10.58%
Equity Weight 71.14%
Equity Cost 10.58%
WACC 10.58%
Leverage 40.58%

11. Quality Control: Playtech plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Betsson

A-Score: 6.7/10

Value: 6.8

Growth: 7.9

Quality: 8.4

Yield: 3.8

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
SkiStar

A-Score: 5.2/10

Value: 3.6

Growth: 7.1

Quality: 5.7

Yield: 2.5

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Partouche

A-Score: 4.8/10

Value: 8.3

Growth: 4.7

Quality: 2.1

Yield: 1.9

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Gambling.com

A-Score: 4.2/10

Value: 5.6

Growth: 9.7

Quality: 6.4

Yield: 0.0

Momentum: 2.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Gaming Innovation Group

A-Score: 3.9/10

Value: 4.6

Growth: 7.1

Quality: 5.3

Yield: 0.0

Momentum: 4.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Playtech

A-Score: 3.8/10

Value: 8.0

Growth: 2.8

Quality: 6.2

Yield: 5.0

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.86$

Current Price

2.86$

Potential

-0.00%

Expected Cash-Flows