Kambi (Buy, TP: SEK180.00) - Preparing for more action

We reiterate our BUY and SEK180 target price, and expect Q1 to show Kambi is on track to meet its 2024 revenue and EBIT guidance. The near-term outlook is positive in our opinion (key sports events like UEFA Euro 2024, and onboarding new key customers), and a new CEO should be announced soon. We have raised our 2024e EBIT by 3%, and expect more clarity on future potential buybacks (new framework to be put to the AGM).

Kambi Group Plc: 2 directors

Two Directors at Kambi Group Plc bought 15,000 shares at between 101.700SEK and 105.308SEK. The significance rating of the trade was 53/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over ...

Kambi (Buy, TP: SEK180.00) - Succession in the making

We have cut our 2024e adj. EPS by c30% reflecting Kambi’s cautious revenue guidance, partly explained by the less-attractive terms in the contract extension with Kindred. Consequently, we have cut our target price to SEK180 (235) but reiterate our BUY ahead of the CEO change, re-based consensus, a healthy customer pipeline, intact structural tailwind, and as we remain optimistic on earnings growth in the forecast period.

Kambi (Buy, TP: SEK235.00) - An eventful year ahead

We reiterate our BUY but have lowered our target price to SEK235 (250) after cutting our 2024 adj. EPS by 8%. We expect soft Q4 earnings, burdened by player-friendly results (sports margin) and a high drop through. However, the 2024 outlook remains positive, with key sport events and contributions from new key clients. The negatives are more than discounted, we believe.

Kambi - Initiation of coverage - The odds are improving

Kambi has carved out a leading position as a trusted B2B sportsbook provider in a structurally growing market. With multiple key markets set to regulate, rising online penetration and positive customer sign-up momentum, we believe Kambi is poised for a 2023–2025e EBIT CAGR of 28%. We initiate coverage with a BUY and SEK250 target price, while our bull-case revenue scenario for 2025 is c50% above consensus.

Kambi - Slow quarter, but the market overreacted

Limited absolute Q3 deviations Mixed estimate changes on multiple factors Retain BUY – attractive long-term with near-term triggers

Kambi - Miss, despite an extraordinary SB margin

Q3 sales slightly below expectations, adj. EBIT miss Cons likely to lower ’22e adj. EBIT by 5-10% Share likely to underperform the market slightly today

Kambi - Penn contract appears longer than expected

Penn migration agreement released Kambi gets USD 27.5m in non-recurring payments Retail migration in 2024 better than we expected

Kambi - Negligible signings do not saturate the market

Q3e: sales down 9% y-o-y, adj. EBITDA down 46% We include Shape Games from September Trading at ‘22e EV/S of 2.7x – well below peer take-outs

Kambi - Putting the cash to work

Acquires front-end specialist Shape Games Total consideration corresponds to ‘22e EV/S of 5x A piece to the modular offering

Kambi - Awaiting high season

A slow Q2, misses on adj. EBIT Minor negative sales revisions, ‘22e EBIT down 4% One step closer to the modular offering

Kambi - Q2 beat on lower opex

Q2 EBIT beat, sales slightly below Cons likely to lower ‘22e EBIT by 3-5% Share likely to underperform today by 3-5%

Kambi - Q2’22e: Decent given a thin sports calendar

We enter the seasonally weakest sports quarter Negative estimate revisions BetCity gone in Q4’26?

Sector Fast Comment - Leo Vegas receives a 44% premium bid

Bid corresponds to 11.3x ‘22e EV/EBITDA (Factset cons) We prefer Kindred, and note the 11 US market accesses Consolidation continues – positive read-x to the sector

Kambi - A bumpy road to show the true long-term value

Q1 miss on numbers, but pipeline seems strong Small sales revisions – ‘22e EBIT down 4% We reiterate BUY – long-term story is intact

Kambi - Miss on numbers, but could be anticipated

Miss on sales and EBIT – SB margin below avg. Small negative cons. revisions expected Expect a fairly neutral share price reaction

Sector Report - A defensive position in uncertain times

Kambi - ESG profile

Kambi’s workforce is diverse, representing over 35 different nationalities. Diversity, equality and anti-discrimination are thus important focus areas for the company. Anti-bribery and anti-corruption are two other issues with strict internal controls. Kambi’s legal and compliance team frequently reviews the company’s processes and makes risk assessments. As a digital company, Kambi’s energy use and business travel have an environmental impact. Therefore, Kambi tries to reduce its business-relat...

Kambi - We remain optimistic – BUY

Underlying numbers above expectations Guidance of high growth in costs – we lower EBIT Optimistic view on Kindred contract – reiterate BUY

Kambi - Underlying growth looks solid

Strong underlying network growth*, +38% y-o-y We expect ‘22e cons. EBIT to come down by ~5-10% Share reaction much depends on the conf. call today