CBRE Equity Research defends Flutter Entertainment plc (OTCPK:PDYPY) following its earnings selloff on the view that the stock is still a compelling way to play the U.S. sports betting and iGaming market
Analyst John DeCree: "We still believe the US business is being underappreciated by the market. While DKNG has been the valuation benchmark for the sector as the only large cap pure-play on US sports betting, we believe FanDuel should trade at a premium given its leading market share, clearer path to profitability, and ability to self-fund growth. Assuming a 4x multiple of FY23 revenue, we estimate FanDuel is worth roughly £54/share. This valuation implies the rest of the business is trading at 7.2x F23 EBITDA. An even more conservative valuation of FanDuel based on 2.5x FY23 revenue would imply the core business is trading at 9.5x FY23 EBITDA, which is still undemanding."
Decree reminded that away from the US, Australia and other new potential international markets could be bright spots for Flutter Entertainment (OTCPK:PDYPY).
CBRE reeled in some estimates on Flutter Entertainment (OTCPK:PDYPY) but kept a Buy rating in place.
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