ENT LN
Entain plc
Consumer
08/30/2022
Presented
| Date | 08/23/2022 |
| Price | £12.97 |
| Market Cap | $11.73B |
| Ent Value | $14.72B |
| P/E Ratio | 37.69x |
| Book Value | £5.64 |
| Div Yield | 0.66% |
| Shares O/S | 588.78M |
| Ave Daily Vol | 1,791,338 |
| Short Int | N/A |
Current
| Price | £6.81 |
| Market Cap | $6.69B |
| Entain Plc engages in the provision of online sports betting and gaming. It operates through the following business segments: Online, UK Retail, European Retail, Corporate, and Other. The Other segment comprises betting and gaming activities from online and mobile operations, Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes and Sportingbet; Gaming Brands include Casino Club, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino. The UK Retail segment comprises betting activities in the shop estate in Great Britain, Northern Ireland and Jersey. The European Retail segment comprises all retail activities connected with the Republic of Ireland, Belgium, Italy and Spain (JV) shop estates. The Corporate segment includes costs associated with Group functions including Group executive, legal, Group finance, tax and treasury. The Other segment includes activities primarily related to telephone betting, Stadia, Betdaq, on course pitches and Intertrader. The company was founded on November 30, 2004 and is headquartered in Douglas, the United Kingdom. |
Publicly traded companies mentioned herein: DraftKings Inc (DKNG), Entain PLC (ENT LN), Flutter Entertainment PLC (FLTR LN), MGM Resorts International (MGM)
Highlights
The presenter is long shares of Entain PLC (ENT LN), one of the largest global sports betting and gaming groups operators in the online and retail sectors. With an extremely well integrated tech stack that allows the company to achieve synergies through M&A in a faster time relative to competitors like Flutter, ENT should achieve at least 20% - 25% IRR on any new acquisitions. The company has strong FCF, having financed its M&A last year using ~80% of its £255MM FCF, making the presenter bullish on further acquisitions. In addition, as the industry moves past region specific shocks such as the UK gambling whitepaper and the US returning to a more sustainable promotional cadence, it could grow EBITDA 35% per year for the next few years with optionality up to 70% growth should its MGM business turn positive. For valuation, he recognizes that gambling companies always trade below their fair values, and applies a historical 11x EBITDA multiple to the online business and 6x to the retail business, leading the stock to double by the end of next year.
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