ENT LN

Entain plc

TMT, Consumer


Presented:08/08/2023
Price:£13.71
Cap:$13.46B
Current Price:£6.81
Cap:$6.69B

Presented

Date08/08/2023
Price£13.71
Market Cap$13.46B
Ent ValueN/A
P/E Ratio332.77x
Book Value£4.53
Div Yield1.24%
Shares O/S638.78M
Ave Daily Vol1,332,941
Short IntN/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: Entain PLC (ENT LN), MGM Resorts International (MGM)

Highlights

The presenter is long shares of Entain PLC (ENT LN), a sports betting and iGaming company currently trading at £13.75 per share. He describes the company as a true compounder, historically growing EBITDA 5% – 10% per year, absent any major impacts from regulatory changes. ENT is a top-3 player in all of its geographic markets and doesn’t experience significant earnings volatility given the industry’s maturity outside the US. However, regulatory overhangs have led to a tough year for the company and its valuation; the stock is roughly flat YTD but has been choppy and is down ~14% from its 2023 peak. He ultimately values the core business at £15 – £16 per share using an undemanding 9.5x – 10x multiple on his 2025 EBITDA forecast, which is roughly in line with the consensus £1.28B estimate. Investors also receive ENT’s 50% stake in its US joint venture BetMGM, the #3 player in sports betting and the #1 player in iGaming that he values between £5 – £7 per share.

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