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1. Company Snapshot

1.a. Company Description

Inspired Entertainment, Inc., a business-to-business gaming technology company, supplies content, platform, and other products and services to regulated lottery, betting, and gaming operators worldwide.The company operates through four segments: Gaming, Virtual Sports, Interactive, and Leisure.The Gaming segment supplies gaming terminals and software to betting offices, casinos, gaming halls, and high street adult gaming centers; a portfolio of games through its digital terminals under the Centurion and Super Hot Fruits names; and traditional casino games, such as roulette, blackjack, and number games.


The Virtual Sports segment designs, develops, markets, and distributes ultra-high-definition sports games that include greyhounds, tennis, motor racing, cycling, cricket, speedway, golf, and dart, and other horse racing games under the V-Play Soccer, V-Play Football, V-Play Basketball, Virtual Grand National, and V-Play NFLA names.The Interactive segment provides a range of premium random number generated casino content from feature-rich bonus games to European-style casino free spins and table games.The Leisure segment supplies gaming terminals and amusement machines in pubs, bingo halls, and adult gaming centers, as well as family entertainment centers, bowling centers, and other entertainment venues.


Inspired Entertainment, Inc.is headquartered in New York, New York.

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1.b. Last Insights on INSE

Inspired Entertainment's recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.28 per share, falling short of the Zacks Consensus Estimate of $0.30 per share. The company's sale of its UK holiday parks business to GENDA Inc. for £18.6 million may lead to a more focused operations. Conversely, expansion into new markets, such as West Virginia, and partnerships, like the one with Gaming Arts LLC, could drive growth. According to Marketbeat Ratings, the company has a consensus recommendation of "Moderate Buy".

1.c. Company Highlights

2. Inspired Entertainment's Q3 2025 Earnings: A Strong Performance

Inspired Entertainment reported a robust financial performance in Q3 2025, with adjusted EBITDA reaching $32.3 million, surpassing consensus estimates. The trailing 12-month adjusted EBITDA stood at $110 million, exceeding last year's performance. The company's actual EPS came in at $0.28, slightly below estimates of $0.3. Revenue growth is expected to be negative, with analysts estimating a -7.5% growth rate for the next year. Despite this, the company's Interactive segment achieved over 40% year-over-year adjusted EBITDA growth for the ninth consecutive quarter.

Publication Date: Nov -18

📋 Highlights
  • Strong Q3 Financial Performance:: Achieved $32.3M adjusted EBITDA and $110M trailing 12-month adjusted EBITDA, surpassing consensus and prior-year results.
  • Interactive Segment Growth:: Delivered 40%+ YoY adjusted EBITDA growth for ninth consecutive quarter, with October as the highest revenue month in company history.
  • Strategic Divestiture Impact:: Closure of holiday parks business on Nov 7 expected to reduce CapEx by 40% and headcount by nearly 40%, improving EBITDA margins.
  • 2026–2027 Margin Expansion:: Targeting 1,000 bps adjusted EBITDA margin increase to 45% by 2027, driven by digital mix (60% post-corporate allocation), operational reengineering, and divestiture synergies.
  • Share Buyback & M&A Focus:: Announced $25M share repurchase plan and prioritized tuck-in acquisitions in Interactive studios, VLTs, and equipment, avoiding large M&A due to operational stability.

Segment Performance

The Interactive segment's growth was a key driver of the company's overall performance, with October being the single largest revenue month in the company's history. The Virtual Sports segment has also shown signs of stabilization, with the company working to secure more operators in the US. The company's North American VLT business is gaining momentum, and the refreshed terminals in the Greek estate are having a positive impact.

Strategic Initiatives

Inspired Entertainment is focused on making North America a bigger part of its business, with the growth of its Interactive business being a key driver. The company has closed the sale of its holiday parks business, which is expected to contribute to higher adjusted EBITDA margins, lower CapEx, and a nearly 40% lower headcount. The company has also announced a $25 million share buyback plan as part of its plans for the future.

Valuation and Outlook

The company's valuation metrics provide some insight into what's priced in. The P/S Ratio stands at 0.65, while the EV/EBITDA ratio is 15.1. The company's projections for 2026 and 2027 include a 1,000 basis point increase in adjusted EBITDA margin, driven by the increased digital mix, the sale of holiday parks, and operational reengineering. With a current P/E Ratio of 3.51, the stock appears to be undervalued, but the negative ROE of -1021.67% and ROIC of -97.7% raise concerns about the company's profitability.

M&A and Future Plans

Lorne Weil stated that the company is only interested in deals that have significant touchpoints with its operations, allowing for meaningful immediate synergies and financial sense. The company is looking at tuck-in acquisitions that strengthen its existing businesses, such as interactive studios or interactive businesses with complementary products. With a Net Debt / EBITDA ratio of 9.51, the company's leverage is a concern, but the Free Cash Flow Yield of 12.63% is a positive.

3. NewsRoom

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Inspired Announces Closing of Sale of UK Holiday Parks Business to Genda Inc.

Nov -07

Source: globenewswire.com

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Inspired Entertainment, Inc. (INSE) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Inspired Entertainment (INSE) Q3 Earnings Lag Estimates

Nov -05

Source: zacks.com

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Inspired Entertainment Expands Footprint into West Virginia Market with Premier iGaming Content

Oct -20

Source: globenewswire.com

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Inspired Entertainment, Inc. (NASDAQ:INSE) Receives $14.00 Average Target Price from Brokerages

Oct -20

Source: defenseworld.net

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Gaming Arts LLC Announces Partnership with Inspired Entertainment to Bring Online Titles to North and South American Land-Based Markets

Oct -06

Source: globenewswire.com

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Inspired Entertainment: Modeling The Turnaround Path

Aug -29

Source: seekingalpha.com

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Inspired Announces Proposed Sale of UK Holiday Parks Business to GENDA Inc.

Aug -27

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.93%)

6. Segments

Gaming

Expected Growth: 10.8%

Inspired Entertainment's 10.8% growth in Gaming is driven by increasing demand for online gaming, expansion into new markets, and strategic partnerships. The company's diversified portfolio of virtual sports, casino, and slots games also contributes to growth. Additionally, investments in technology and user experience enhancements improve customer engagement and retention, further fueling growth.

Leisure

Expected Growth: 10.95%

Inspired Entertainment's Leisure segment growth of 10.95% is driven by increasing demand for virtual sports and interactive gaming, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, product diversification, and operational efficiencies have contributed to its growth momentum.

Virtual Sports

Expected Growth: 10.95%

Inspired Entertainment's Virtual Sports segment growth of 10.95% is driven by increasing adoption in online gaming, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as AI-powered simulations, and its diversified product portfolio are contributing to the segment's growth.

Interactive

Expected Growth: 11.53%

Inspired Entertainment's Interactive segment growth of 11.53% is driven by increasing demand for online gaming, expansion into new markets, and strategic partnerships. The company's diverse portfolio of virtual sports, casino, and slots games also contributes to growth. Additionally, investments in technology and user experience enhancements have improved customer engagement and retention, further fueling growth.

7. Detailed Products

Virtual Sports

Inspired Entertainment's Virtual Sports products offer ultra-realistic and engaging virtual sports betting experiences, including football, basketball, tennis, and horse racing.

Interactive Gaming

Inspired Entertainment's Interactive Gaming products offer a range of online and mobile games, including slots, table games, and scratch cards.

Server-Based Gaming

Inspired Entertainment's Server-Based Gaming products offer a range of land-based gaming solutions, including slots, electronic table games, and electronic roulette.

Lottery and Gaming Systems

Inspired Entertainment's Lottery and Gaming Systems products offer a range of solutions for lotteries and gaming operators, including lottery management systems and gaming platforms.

8. Inspired Entertainment, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Inspired Entertainment, Inc. is medium due to the presence of alternative gaming and entertainment options available to customers.

Bargaining Power Of Customers

The bargaining power of customers for Inspired Entertainment, Inc. is low due to the company's strong brand recognition and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Inspired Entertainment, Inc. is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants for Inspired Entertainment, Inc. is high due to the relatively low barriers to entry in the gaming and entertainment industry.

Intensity Of Rivalry

The intensity of rivalry for Inspired Entertainment, Inc. is high due to the presence of several established competitors in the market, leading to a highly competitive environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 132.22%
Debt Cost 11.08%
Equity Weight -32.22%
Equity Cost 11.08%
WACC 11.08%
Leverage -410.38%

11. Quality Control: Inspired Entertainment, Inc. passed 2 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
Inspired Entertainment

A-Score: 5.4/10

Value: 9.1

Growth: 6.9

Quality: 6.0

Yield: 0.0

Momentum: 5.5

Volatility: 5.0

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PlayAGS

A-Score: 5.3/10

Value: 5.1

Growth: 6.7

Quality: 5.7

Yield: 0.0

Momentum: 6.0

Volatility: 8.3

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Everi

A-Score: 4.8/10

Value: 5.1

Growth: 4.7

Quality: 4.8

Yield: 0.0

Momentum: 6.0

Volatility: 8.3

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Century Casinos

A-Score: 3.6/10

Value: 8.8

Growth: 2.9

Quality: 3.8

Yield: 0.0

Momentum: 4.5

Volatility: 2.0

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Full House Resorts

A-Score: 3.5/10

Value: 9.6

Growth: 2.9

Quality: 3.9

Yield: 0.0

Momentum: 1.5

Volatility: 3.0

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Stock-Card
Ballys

A-Score: 2.1/10

Value: 5.2

Growth: 4.4

Quality: 1.4

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.78$

Current Price

8.78$

Potential

-0.00%

Expected Cash-Flows