GAN Ltd. (NASDAQ: GAN) shares surged on Thursday after the company lifted its earnings before interest, taxes, depreciation, and amortization (EBITDA). GAN also revealed revenue guidance for the second quarter and also its top-line outlook.
The $125 million to $135 million for 2021 and a $34 to $35 million revenue helped GAN stock gain modestly this week while edging the 16 percent year-to-date loss.
B. Riley analyst David Bain believes that the gain is sustainable. Bain added that the update guidance affirms that the company has solid business-to-business growth. Bain added reiterated that a GAN stock buy of $26 is an upside of 53 percent from the 9th July closing of $17.02.
GAN’s quick gain arise from new customers in markets like Latin America and Northern Europe. GAN acquired Coolbet last November at $175 million in cash and stock. The acquisition is considered a big contributor to the strong guidance.
GAN closed the acquisition transaction in the last quarter. Bain said the timing was right because the international sports were on the way. The gaming provider benefited from Euro Football and Copa America.
GAN stock could have also been boosted by several deals the company has made with Incredible Technologies and Ainsworth. The two companies have 10 percent of North American slot machines sales, thus bolstering GAN’s online slots platform.
GAN also has an incredibly growing internet casino footprint that could attract investors. Most market participants are currently assigning higher multiples to online sportsbook operators while ignoring long growth margins offered by iGaming companies. Bain believes that the growth trajectory could finally be a boost to a technology provider like GAN.
“We believe GAN continued to pursue additional exclusive content opportunities for both slots and tables, and continue to believe the differentiator will be a key component to additional GAN tentacles in iGaming total addressable market growth.”