Gambling stocks outperform tech shares in Q4, but who are the winners and losers?

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Once a quarter, the Online Gambling Quarterly provides an overview of the best-performing shares of online gambling operators and service providers.

In its latest report, the biggest leap among the analysed “pure” online gambling companies was taken by Kindred Group, with an increase of +28% over the past three months.

Share developments

It looks like the online gambling industry had a strong quarter. The average share price in the industry saw an increase of +6% in Q4 2022, outperforming other tech shares and the Nasdaq Composite, which saw a decline of -3%. Below are the key results of the analyses. You can find more insights here.

Winner: The biggest leap in the sample of online gambling-focused companies was taken by Kindred with an increase of +28% over the past three months, followed by Betsson (+28%).

Loser: DraftKings and Catena Media had the worst three-month performance in the analysis with a decrease of -26% and -19%, respectively.

Average: On average, the share prices analysed increased by +6%.

Comparison to Nasdaq Composite: Compared to the three-month development of the Nasdaq Composite (-3%), the average growth of the online gambling industry looks “better”.

Multi-channel operators: Among the multi-channel operators that also operate a relevant retail business, US operator Caesars is the “winner” with a share development of +22% over the past three months.

Comparison to multi-channel operators: It is also interesting to compare the performance of exclusively online gambling companies with that of companies also operating a retail/land-based business. The share prices of the online/retail operators analysed increased on average by +15% (compared to +6% for the online-only operators).

P/E ratios

The Online Gambling Quarterly also analysed the current P/E ratios for several companies. The ratio provides a good picture of the value of the company.

Winner: The firm with the lowest P/E ratio which therefore provided the best returns to investors relative to its share price was Betsson, with a ratio of 11. Meanwhile, Zeal/Tipp24 has the highest P/E ratio of the analysed firms, at 41.

Average: The average P/E ratio of the sample analysed is 21 (median of 22).

Market cap in relation to Q3 2022 revenue

Traditionally, market capitalisation is correlated to earnings-related figures. But in times of rapidly changing markets and a relevant number of new and growing market players, earnings-related analyses may be less conclusive.

Therefore, researchers also set the market caps in relation to the most recent quarterly revenues (Q3 2022). For operators, the Online Gambling Quarterly used net gaming revenue, and for others, including suppliers and affiliates, they used revenue derived from online gambling. In some cases, the revenues reported might not be entirely comparable, but the analysis still indicates the market dynamics.

Winner: Evolution leads the ranking in market cap in relation to the most recent quarterly revenue with 54, followed by Zeal/Tipp24 (26) and Scout Gaming (16).

Average: The average ratio of the companies analysed is 13 (median of 9).

If you are interested in learning more, check out the free data magazine – www.quarterly.og-q.com.

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