UPDATE: B.Riley Starts Golden Nugget Online Gaming (GNOG) at Buy
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B.Riley analyst David Bain initiates coverage on Golden Nugget Online Gaming (NASDAQ: GNOG) with a Buy rating and a price target of $27.00.
The analyst comments "We initiate coverage of Golden Nugget Online Gaming, Inc. (GNOG), an online casino (“iGaming”) focused entertainment company, with a Buy rating and a 12-month price target of $27 per share. We believe GNOG’s sustained iGaming market share in New Jersey, the most mature U.S. legal iGaming market, justifies our conservative market share ramp assumptions in upcoming iGaming market go-lives and offers case study visibility to GNOG’s profitability. Applying New Jersey GNOG market share and historical margins, we calculate GNOG could generate iGaming EBITDA of over ~$700M at iGaming TAM maturity. GNOG’s iGaming focus, combined with its experiential casino site differentiation and strong branding, offers investors a more predictable, stickier, and profitable avenue to play online gaming growth than online sports betting (OSB), in our view. Finally, GNOG’s recent and expected upcoming market entrances are set to triple its TAM by the end of next year. Yet, despite these positives, GNOG trades at 3.2x CY23 EV/sales, versus comparables at 3.8x."
Shares of Golden Nugget Online Gaming closed at $12.01 yesterday.
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