Edison Investment Research - Stride Gaming (STR) Stride Gaming - On track for underlying margin expansion

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Edison Investment Research

Victoria Pease

Stride Gaming - On track for underlying margin expansion

Strideâ€™s AGM trading update confirmed the continued momentum in its core real money gaming (RMG) vertical. The Aspers Casino partnership has had an encouraging start and Stride is well positioned to keep gaining market share. Its key differentiating factor is the high-performing proprietary platform and we expect underlying margin expansion as customers migrate from acquired businesses. We believe that visibility into the social gaming vertical (5% of revenues) remains limited and we have lowered our future revenue forecasts by c Â£2m per year. Our profit forecasts are unchanged. At 7.4x EV/EBITDA and 10.8x P/E for CY18, Stride trades at a meaningful discount to peers.

01/02/2018 5 EN

Underlying

Stride Gaming

Stride Gaming is an online gaming operator in online bingo, slot gaming and social gaming mobile applications. Co. operates a multi-branded multi-platform strategy to complement its own proprietary and acquired software. Co. focuses on the U.K. market for online bingo market and with its social gaming market reaches internationally with a focus on the North American market. Co. owns 105 brands of games, including the online bingo brands Kitty Bingo, Lucky Pants Bingo, Bingo Extra, Jackpot CafA(c) and Jackpot Liner, King Jackpot, together with the online casino brands Spin and Win, Magical Vegas and Big Top.

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Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Victoria Pease

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Stride Gaming - Recommended cash offer from Rank

Rank Group has made a recommended Â£115.3m cash offer for Stride Gaming, which equates to an EV of Â£93.4m. Using the run-rate H119 EBITDA, the deal is valued at c 7.5x EV/EBITDA. The offer of 151p per share is a 29% premium to the previous dayâ€™s closing price. Irrevocable commitments have been received by 61.3% of Strideâ€™s shareholders and completion is anticipated in Q319.

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Stride Gaming - Suspension of estimates

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Stride Gaming - On track for underlying margin expansion

Form 8.3 - Chelverton UK Dividend Trust plc: Stride Gaming Plc

Stride Gaming - Recommended cash offer from Rank

Stride Gaming - Suspension of estimates

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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