OGQ: LeoVegas and Betsson top growth shares in Q2 2022

Once a quarter the Online Gambling Quarterly provides an overview of the best performing shares of online gambling operators and service providers. The biggest leap among the analysed “pure” online gambling companies was taken by LeoVegas with an increase of +58% over the past three months.

Share developments

Again a pretty tough quarter for online gambling shares but in line with the overall tech stock decline (Nasdaq down -22% in Q2). Below are the key results of the analyses:

• “Winner” – The biggest leap in the sample of online gambling-focused companies was taken by LeoVegas with an increase of +58% over the past three months (MGM acquisition); followed by Betsson (+7%).
• “Loser” – DraftKings and Catena Media had the worst three-month performance in the analysis with a decrease of -38% and -34%.
• Average growth – On average, share prices analysed decreased by -16%.

• Comparison to FTSE 100 – Compared to the three-month development of the FTSE 100 (-5%), the average growth of the online gambling industry looks “worse”.
• Multi-channel operators – Among the multi-channel operators that also operate a relevant retail business, Entain is the “winner” with a share development of -24% over the past 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 decreased on average by -32% (compared to -16% 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.

• Inspired has the highest P/E ratio – Inspired leads the ranking with a P/E ratio of 83.
• Average P/E ratio – The average P/E ratio of the sample analysed is 25 (median of 18).

Market capitalisation in relation to Q1 2022 revenue

Traditionally, market capitalisation is correlated to earnings-related figures. But in times of rapidly changing markets (eg US) and a relevant number of new and growing market players, earnings-related analyses may be less conclusive. Therefore, the researchers also set the market capitalisation in relation to the most recent quarterly revenue (in this analysis: revenue in Q1 2022). For operators, the Online Gambling Quarterly took the net gaming revenue, and for all others (tech providers, affiliates, …) it took the revenue related to online gambling (if reported). In some cases, the revenue reported might not be entirely comparable, but the analysis indicates the market dynamics.

• Evolution has the highest market cap/revenue ratio – Evolution leads the ranking in market capitalisation in relation to the most recent quarterly revenue with 56; it is followed by Zeal/Tipp24 (32) and Inspired (31).
• Average ratio – The average ratio of the companies analysed is 15 (median of 10).