Stifel reiterates Buy rating on Gambling.com stock, maintains $15 target

Investing.com - Stifel has reiterated its Buy rating on Gambling.com Group Ltd. (NASDAQ:GAMB) with a price target of $15.00, according to a research note published Monday. The target represents significant upside potential from the current price of $8.12, with the stock trading near its 52-week low and showing signs of undervaluation according to InvestingPro analysis.

The firm believes Gambling.com’s expansion into adjacent marketing channels will help offset the impact of artificial intelligence, though these new channels will operate at structurally lower margins than the company’s core business. Despite these concerns, the company maintains impressive gross profit margins of 94% and has achieved robust revenue growth of 27.6% over the last twelve months.

Stifel identified OpticOdds as the most promising opportunity for Gambling.com, citing a large potential client base, strong conversion rates from trial to customer, and product expansion possibilities.

The research note attributed Gambling.com’s recent fiscal year 2025 guidance reduction primarily to Google’s mid-July algorithm update, with effects potentially continuing until December, though Stifel believes this impact has been conservatively factored into the company’s guidance.

While acknowledging that AI presents an ongoing valuation challenge for Gambling.com, Stifel expressed optimism about the company’s Data Services opportunity, suggesting this organic mix shift could support a valuation floor and provide additional acquisition potential.

In other recent news, Gambling.com Group Ltd. reported its second-quarter 2025 earnings, delivering an impressive earnings per share (EPS) of $0.37, significantly surpassing the forecasted $0.17. The company’s revenue for the quarter was $39.6 million, slightly above the expected $38.92 million. Despite these positive results, Gambling.com adjusted its fiscal year 2025 guidance, reducing its adjusted EBITDA forecast by 7% at the midpoint. Analysts from Stifel, BTIG, and Jefferies have all lowered their price targets for Gambling.com, citing various reasons. Stifel decreased its target to $15 due to the impact of generative AI, while BTIG reduced its target to $12, pointing to challenges in the company’s core search business. Jefferies also adjusted its target to $15, reflecting updated financial projections and slight modifications to revenue and adjusted EBITDA estimates. These developments come amid an environment of merger and acquisition activity, favorable foreign exchange conditions, and improved subscription performance, which have slightly raised absolute revenue guidance.

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