DoubleDown Stock Could Be Near Double in the Making

Social cassino manipulator DoubleDown Interactive (NASDAQ:DDI) went public earlier this month. While the stock up is trading slightly to a lower place its initial public offering (IPO) price, it’s draftsmanship some ahead of time optimism in the analyst community.

In a recent note to clients, B. James Whitcomb Riley psychoanalyst David Bain initiates reporting on DoubleDown with a “buy” rating and a 12-month $30 cost target. That’s fountainhead higher up the stock’s current grip of $17.55, and to a greater extent than 62 percent higher than its $18.50 IPO price.

We believe shares doh non yet reflect DDI’s (1) highly predictable and consistently growing revenue/EBITDA/FCF anchored past unique content, best-in-class data-based analytics, and real-time marketing inwards its core group online societal cassino business; (2) better-than-peer fair cay carrying into action indicators (KPIs),” said Bain.

B. James Whitcomb Riley was the trail underwriter for the DoubleDown IPO, and also announced a tenderize bid to purchase an additional two billion shares of the new public gaming company.

More Catalysts for DoubleDown Stock

The cosmos of in public traded wandering games developers and social cassino operators, of which DoubleDown is one, is rapidly expanding. However, the recent range of IPOs inward this blank space is a mixed bag, with some names plunging followers public debuts.

Still, some on Wall Street are optimistic almost the futurity of select companies inwards this space. They are noting in-app purchases are soaring, the accelerator of young game introductions, and elaboration opportunities that aren’t currently reflected inwards part prices. It adds upwardly to an industry that appears ripe for mergers and acquisitions activity. Plus, inwards the display case of DoubleDown, the stock up is inexpensive comparative to competitors.

“We calculate CY22E/CY23E earnings before interest, taxes, depreciation and amortisation (EBITDA) growth of +8%/+13%, net disengage hard cash flow of $95 million/$108 million, and CY23E termination nett immediate payment of more or less $393 million. DDI trades at CY22E/CY23E EV/EBITDA of 4.6x/3.4x, versus peers at 15.9x/14.3x,” adds Bain.

Social Casino Growth Could Power DoubleDown Stock

While the societal casino investiture thesis is largely overshadowed past iGaming and sports wagering, data sustain it’s on a torrid development tread of its own, and South Korea-based DoubleDown is participating in that growth.

“DDI generates magnetic core revenue/EBITDA from the $7.5B online societal casino industry, which has an eight-year CAGR of ~23%. Despite CY20A COVID-led +25% manufacture growth (DDI revenue maturation was +31%), CY21 is tracking Y/Y growth, which should speed inwards CY22E/CY23E, in our view,” notes Bain.

DoubleDown has some advantages investors may not in time follow aware of. For example, its cognitive content program library features Fort Knox, Megabucks, and Wheel of Fortune — leash of the most successful slots games of all time from the International Game Technology (IGT) stable. Plus, DoubleDown is an asset and cap expenditure light.

“We trust potency upside optionality versus our forecast includes (1) our potential conservative social casino manufacture outlook, (2) DDI’s enlargement into a unexampled wandering game category (simultaneous with its social gambling casino scale/mix of licensed versus proprietary games keeping calm to upward EBITDA security deposit momentum), and (3) possible substantial security deposit benefits from rock-bottom weapons platform fees due to a recent sound decision that may broaden in-app (or out-of-app) consumer purchasing options,” concludes Bain.

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